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 811-215
Fidelity Hastings Street Trust
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Marc Bryant, Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code:
617-563-7000
Date of fiscal year end: | June 30 |
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Date of reporting period: | June 30, 2016 |
Item 1.
Reports to Stockholders
Fidelity® Growth Discovery Fund Annual Report June 30, 2016 |
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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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Growth Discovery Fund | (1.68)% | 10.78% | 8.23% |
Prior to February 1, 2007, the fund operated under certain different investment policies and compared its performance to a different index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Growth Discovery Fund, a class of the fund, on June 30, 2006.
The chart shows how the value of your investment would have changed, and also shows how the Russell 3000® Growth Index performed over the same period.
| Period Ending Values | ||
| $22,049 | Fidelity® Growth Discovery Fund | |
| $22,920 | Russell 3000® Growth Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and Brexit – dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Federal’s rate-tightening posture. However, the U.K.’s late-June vote in favor of Brexit resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, with the Russell 2000® Index returning -6.73%. The tech-heavy Nasdaq Composite Index® returned -1.68%, as major constituent Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted traditionally defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager Jason Weiner: For the year, the fund’s share classes posted declines in the low single digits, lagging the 1.88% gain of the benchmark Russell 3000® Growth Index by about 3.5 percentage points. Versus the benchmark, both security and market selection dragged on results this period. In particular, picks in the pharmaceuticals, biotechnology & life sciences group hurt, as did positioning in the food, beverage & tobacco and real estate industries. Among individual detractors, an out-of-index position in Canada-based Valeant Pharmaceuticals International easily hurt the most. Valeant shares returned -87% for the fund this period, falling sharply in mid-March after the company, known for acquiring drugs then raising their prices, said it might default on its debt and would not meet earnings targets. The firm also announced an accounting error that it said would likely lead to financial restatements. The firm continues to face a U.S. Department of Justice investigation into its drug-pricing practices. We sold our position before period end. On the positive side, stock selection within the software & services group lifted relative performance. From this group, Facebook was by far the biggest individual contributor and biggest fund holding this period. Facebook shares rose 33% on the strength of its revenue from mobile advertising, which helped the social-networking company in January surpass $1 billion in quarterly earnings for the first time. The firm continued to show increased per-user revenue metrics in North America and Europe.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Facebook, Inc. Class A | 12.6 | 11.5 |
| Alphabet, Inc. Class A | 7.8 | 7.2 |
| Gilead Sciences, Inc. | 3.3 | 4.3 |
| Amazon.com, Inc. | 3.1 | 2.8 |
| Salesforce.com, Inc. | 2.8 | 2.5 |
| Danaher Corp. | 2.6 | 2.2 |
| Home Depot, Inc. | 2.5 | 2.4 |
| Electronic Arts, Inc. | 2.4 | 1.9 |
| Alphabet, Inc. Class C | 2.1 | 1.1 |
| Starbucks Corp. | 2.0 | 2.4 |
| 41.2 |
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Information Technology | 38.2 | 41.4 |
| Consumer Discretionary | 16.0 | 16.5 |
| Health Care | 13.2 | 16.4 |
| Industrials | 9.7 | 9.2 |
| Financials | 8.0 | 6.3 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016* | ||
| Stocks | 94.0% | |
| Convertible Securities | 0.8% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 5.2% | |
* Foreign investments - 8.0%
| As of December 31, 2015 * | ||
| Stocks | 92.3% | |
| Convertible Securities | 0.8% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 6.9% | |
* Foreign investments - 15.4%
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 94.0% | |||
| Shares | Value (000s) | ||
| CONSUMER DISCRETIONARY - 15.9% | |||
| Automobiles - 1.9% | |||
| Tesla Motors, Inc. (a) | 107,200 | $22,756 | |
| Diversified Consumer Services - 0.8% | |||
| Bright Horizons Family Solutions, Inc. (a) | 74,200 | 4,920 | |
| Houghton Mifflin Harcourt Co. (a) | 98,800 | 1,544 | |
| Nord Anglia Education, Inc. (a) | 111,372 | 2,354 | |
| 8,818 | |||
| Hotels, Restaurants & Leisure - 3.7% | |||
| Buffalo Wild Wings, Inc. (a) | 5,500 | 764 | |
| Dave & Buster's Entertainment, Inc. (a) | 125,400 | 5,867 | |
| Domino's Pizza, Inc. | 67,223 | 8,832 | |
| Jubilant Foodworks Ltd. | 23,677 | 400 | |
| Popeyes Louisiana Kitchen, Inc. (a) | 52,400 | 2,863 | |
| Starbucks Corp. | 417,352 | 23,839 | |
| Wingstop, Inc. | 25,700 | 700 | |
| 43,265 | |||
| Household Durables - 0.5% | |||
| Harman International Industries, Inc. | 89,500 | 6,428 | |
| Internet & Catalog Retail - 3.6% | |||
| Amazon.com, Inc. (a) | 51,900 | 37,141 | |
| Liberty Interactive Corp. (Venture Group) Series A (a) | 27,900 | 1,034 | |
| Netflix, Inc. (a) | 36,300 | 3,321 | |
| NutriSystem, Inc. | 54,500 | 1,382 | |
| 42,878 | |||
| Leisure Products - 0.0% | |||
| NJOY, Inc. (a)(b) | 56,145 | 2 | |
| Media - 0.8% | |||
| Charter Communications, Inc. Class A | 27,100 | 6,196 | |
| Sirius XM Holdings, Inc. (a)(c) | 729,800 | 2,883 | |
| 9,079 | |||
| Specialty Retail - 4.0% | |||
| AutoZone, Inc. (a) | 9,800 | 7,780 | |
| Five Below, Inc. (a) | 54,838 | 2,545 | |
| Home Depot, Inc. | 230,424 | 29,423 | |
| Lowe's Companies, Inc. | 68,000 | 5,384 | |
| MarineMax, Inc. (a) | 93,200 | 1,582 | |
| 46,714 | |||
| Textiles, Apparel & Luxury Goods - 0.6% | |||
| Kate Spade & Co. (a) | 361,470 | 7,450 | |
| TOTAL CONSUMER DISCRETIONARY | 187,390 | ||
| CONSUMER STAPLES - 7.0% | |||
| Beverages - 2.8% | |||
| Constellation Brands, Inc. Class A (sub. vtg.) | 31,900 | 5,276 | |
| Kweichow Moutai Co. Ltd. | 28,829 | 1,268 | |
| Molson Coors Brewing Co. Class B | 92,600 | 9,365 | |
| The Coca-Cola Co. | 379,036 | 17,182 | |
| 33,091 | |||
| Food & Staples Retailing - 0.9% | |||
| CVS Health Corp. | 73,600 | 7,046 | |
| Whole Foods Market, Inc. | 111,951 | 3,585 | |
| 10,631 | |||
| Household Products - 0.5% | |||
| Procter & Gamble Co. | 72,400 | 6,130 | |
| Personal Products - 0.9% | |||
| Avon Products, Inc. | 194,400 | 735 | |
| Estee Lauder Companies, Inc. Class A | 63,900 | 5,816 | |
| Herbalife Ltd. (a) | 65,533 | 3,836 | |
| 10,387 | |||
| Tobacco - 1.9% | |||
| Reynolds American, Inc. | 419,600 | 22,629 | |
| TOTAL CONSUMER STAPLES | 82,868 | ||
| ENERGY - 1.0% | |||
| Oil, Gas & Consumable Fuels - 1.0% | |||
| Anadarko Petroleum Corp. | 180,000 | 9,585 | |
| Golar LNG Ltd. | 116,661 | 1,808 | |
| 11,393 | |||
| FINANCIALS - 8.0% | |||
| Banks - 1.0% | |||
| First Republic Bank | 134,800 | 9,435 | |
| HDFC Bank Ltd. | 31,265 | 634 | |
| M&T Bank Corp. | 11,300 | 1,336 | |
| 11,405 | |||
| Capital Markets - 1.3% | |||
| BlackRock, Inc. Class A | 18,694 | 6,403 | |
| E*TRADE Financial Corp. (a) | 379,359 | 8,911 | |
| JMP Group, Inc. | 64,700 | 351 | |
| PJT Partners, Inc. (c) | 9,752 | 224 | |
| 15,889 | |||
| Diversified Financial Services - 2.6% | |||
| Berkshire Hathaway, Inc. Class B (a) | 24,800 | 3,591 | |
| CME Group, Inc. | 142,845 | 13,913 | |
| MSCI, Inc. Class A | 85,100 | 6,563 | |
| S&P Global, Inc. | 60,712 | 6,512 | |
| 30,579 | |||
| Insurance - 0.5% | |||
| Marsh & McLennan Companies, Inc. | 79,700 | 5,456 | |
| Real Estate Investment Trusts - 1.0% | |||
| American Tower Corp. | 104,400 | 11,861 | |
| Real Estate Management & Development - 1.4% | |||
| Realogy Holdings Corp. (a) | 555,381 | 16,117 | |
| Thrifts & Mortgage Finance - 0.2% | |||
| Essent Group Ltd. (a) | 102,100 | 2,227 | |
| TOTAL FINANCIALS | 93,534 | ||
| HEALTH CARE - 13.2% | |||
| Biotechnology - 8.5% | |||
| Amgen, Inc. | 78,200 | 11,898 | |
| BioMarin Pharmaceutical, Inc. (a) | 72,196 | 5,617 | |
| Cytokinetics, Inc. (a) | 25,600 | 243 | |
| Cytokinetics, Inc. warrants 6/25/17 (a) | 288,420 | 213 | |
| Gilead Sciences, Inc. | 467,863 | 39,029 | |
| Insmed, Inc. (a) | 342,678 | 3,379 | |
| Medivation, Inc. (a) | 285,300 | 17,204 | |
| Regeneron Pharmaceuticals, Inc. (a) | 19,300 | 6,740 | |
| TESARO, Inc. (a) | 30,300 | 2,547 | |
| Vertex Pharmaceuticals, Inc. (a) | 156,300 | 13,445 | |
| 100,315 | |||
| Health Care Equipment & Supplies - 2.7% | |||
| Boston Scientific Corp. (a) | 378,100 | 8,836 | |
| Edwards Lifesciences Corp. (a) | 47,500 | 4,737 | |
| Intuitive Surgical, Inc. (a) | 5,700 | 3,770 | |
| Medtronic PLC | 90,700 | 7,870 | |
| Novadaq Technologies, Inc. (a) | 256,100 | 2,520 | |
| ResMed, Inc. | 62,100 | 3,927 | |
| 31,660 | |||
| Health Care Providers & Services - 0.1% | |||
| HealthEquity, Inc. (a) | 12,900 | 392 | |
| VCA, Inc. (a) | 11,100 | 750 | |
| 1,142 | |||
| Pharmaceuticals - 1.9% | |||
| Astellas Pharma, Inc. | 1,363,100 | 21,377 | |
| Collegium Pharmaceutical, Inc. (a) | 30,900 | 366 | |
| 21,743 | |||
| TOTAL HEALTH CARE | 154,860 | ||
| INDUSTRIALS - 9.7% | |||
| Aerospace & Defense - 1.2% | |||
| Honeywell International, Inc. | 85,200 | 9,910 | |
| TransDigm Group, Inc. (a) | 14,927 | 3,936 | |
| 13,846 | |||
| Airlines - 0.7% | |||
| Ryanair Holdings PLC sponsored ADR | 116,564 | 8,106 | |
| Building Products - 0.7% | |||
| A.O. Smith Corp. | 60,944 | 5,370 | |
| Caesarstone Sdot-Yam Ltd. (a) | 81,200 | 2,823 | |
| 8,193 | |||
| Commercial Services & Supplies - 0.7% | |||
| KAR Auction Services, Inc. | 206,700 | 8,628 | |
| Electrical Equipment - 0.6% | |||
| Acuity Brands, Inc. | 23,600 | 5,852 | |
| AMETEK, Inc. | 26,045 | 1,204 | |
| 7,056 | |||
| Industrial Conglomerates - 3.1% | |||
| Danaher Corp. | 299,855 | 30,285 | |
| Roper Technologies, Inc. | 33,414 | 5,699 | |
| 35,984 | |||
| Machinery - 0.0% | |||
| Rational AG | 200 | 93 | |
| Professional Services - 2.4% | |||
| Equifax, Inc. | 57,600 | 7,396 | |
| Resources Connection, Inc. | 99,000 | 1,463 | |
| Robert Half International, Inc. | 128,100 | 4,888 | |
| TransUnion Holding Co., Inc. | 38,400 | 1,284 | |
| WageWorks, Inc. (a) | 213,473 | 12,768 | |
| 27,799 | |||
| Road & Rail - 0.0% | |||
| Swift Transporation Co. (a) | 25,500 | 393 | |
| Trading Companies & Distributors - 0.3% | |||
| HD Supply Holdings, Inc. (a) | 101,900 | 3,548 | |
| TOTAL INDUSTRIALS | 113,646 | ||
| INFORMATION TECHNOLOGY - 37.5% | |||
| Electronic Equipment & Components - 0.2% | |||
| CDW Corp. | 44,100 | 1,768 | |
| Internet Software & Services - 23.7% | |||
| Alibaba Group Holding Ltd. sponsored ADR (a) | 83,100 | 6,609 | |
| Alphabet, Inc.: | |||
| Class A | 130,052 | 91,495 | |
| Class C (a) | 35,616 | 24,650 | |
| Facebook, Inc. Class A (a) | 1,292,191 | 147,668 | |
| GoDaddy, Inc. (a) | 93,300 | 2,910 | |
| Just Dial Ltd. | 61,822 | 562 | |
| JUST EAT Ltd. (a) | 367,603 | 2,098 | |
| Shopify, Inc. Class A (a) | 19,900 | 612 | |
| Stamps.com, Inc. (a) | 26,800 | 2,343 | |
| 278,947 | |||
| IT Services - 2.5% | |||
| Gartner, Inc. Class A (a) | 30,600 | 2,981 | |
| Global Payments, Inc. | 136,700 | 9,758 | |
| Visa, Inc. Class A | 224,196 | 16,629 | |
| 29,368 | |||
| Semiconductors & Semiconductor Equipment - 0.8% | |||
| Maxim Integrated Products, Inc. | 123,305 | 4,401 | |
| Monolithic Power Systems, Inc. | 72,318 | 4,941 | |
| 9,342 | |||
| Software - 10.3% | |||
| Activision Blizzard, Inc. | 113,287 | 4,490 | |
| Adobe Systems, Inc. (a) | 161,500 | 15,470 | |
| Computer Modelling Group Ltd. | 241,400 | 1,932 | |
| CyberArk Software Ltd. (a)(c) | 41,300 | 2,007 | |
| Electronic Arts, Inc. (a) | 370,934 | 28,102 | |
| Fleetmatics Group PLC (a) | 56,200 | 2,435 | |
| Intuit, Inc. | 24,900 | 2,779 | |
| Mobileye NV (a)(c) | 503,469 | 23,230 | |
| Red Hat, Inc. (a) | 110,700 | 8,037 | |
| Salesforce.com, Inc. (a) | 412,864 | 32,786 | |
| 121,268 | |||
| TOTAL INFORMATION TECHNOLOGY | 440,693 | ||
| MATERIALS - 1.5% | |||
| Chemicals - 1.5% | |||
| Albemarle Corp. U.S. | 221,300 | 17,551 | |
| Metals & Mining - 0.0% | |||
| Orocobre Ltd. (a) | 181,246 | 651 | |
| TOTAL MATERIALS | 18,202 | ||
| TELECOMMUNICATION SERVICES - 0.2% | |||
| Diversified Telecommunication Services - 0.2% | |||
| SBA Communications Corp. Class A (a) | 23,800 | 2,569 | |
| TOTAL COMMON STOCKS | |||
| (Cost $869,263) | 1,105,155 | ||
| Convertible Preferred Stocks - 0.8% | |||
| CONSUMER DISCRETIONARY - 0.1% | |||
| Household Durables - 0.1% | |||
| Blu Homes, Inc. Series A, 5.00% (a)(b) | 239,736 | 978 | |
| INFORMATION TECHNOLOGY - 0.7% | |||
| Internet Software & Services - 0.7% | |||
| Uber Technologies, Inc. Series D, 8.00% (a)(b) | 162,572 | 7,929 | |
| IT Services - 0.0% | |||
| AppNexus, Inc. Series E (a)(b) | 48,212 | 810 | |
| TOTAL INFORMATION TECHNOLOGY | 8,739 | ||
| TOTAL CONVERTIBLE PREFERRED STOCKS | |||
| (Cost $4,596) | 9,717 | ||
| Money Market Funds - 6.7% | |||
| Fidelity Cash Central Fund, 0.43% (d) | 55,640,853 | 55,641 | |
| Fidelity Securities Lending Cash Central Fund, 0.46% (d)(e) | 22,776,259 | 22,776 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $78,417) | 78,417 | ||
| TOTAL INVESTMENT PORTFOLIO - 101.5% | |||
| (Cost $952,276) | 1,193,289 | ||
| NET OTHER ASSETS (LIABILITIES) - (1.5)% | (17,571) | ||
| NET ASSETS - 100% | $1,175,718 |
Legend
(a) Non-income producing
(b) 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 $9,719,000 or 0.8% 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost (000s) |
| AppNexus, Inc. Series E | 8/1/14 | $966 |
| Blu Homes, Inc. Series A, 5.00% | 6/21/13 | $1,108 |
| NJOY, Inc. | 9/11/13 | $454 |
| Uber Technologies, Inc. Series D, 8.00% | 6/6/14 | $2,522 |
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 |
| (Amounts in thousands) | |
| Fidelity Cash Central Fund | $196 |
| Fidelity Securities Lending Cash Central Fund | 489 |
| Total | $685 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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 |
| (Amounts in thousands) | ||||
| Investments in Securities: | ||||
| Equities: | ||||
| Consumer Discretionary | $188,368 | $186,988 | $400 | $980 |
| Consumer Staples | 82,868 | 81,600 | 1,268 | -- |
| Energy | 11,393 | 11,393 | -- | -- |
| Financials | 93,534 | 92,900 | 634 | -- |
| Health Care | 154,860 | 133,270 | 21,590 | -- |
| Industrials | 113,646 | 113,553 | 93 | -- |
| Information Technology | 449,432 | 438,033 | 2,660 | 8,739 |
| Materials | 18,202 | 17,551 | 651 | -- |
| Telecommunication Services | 2,569 | 2,569 | -- | -- |
| Money Market Funds | 78,417 | 78,417 | -- | -- |
| Total Investments in Securities: | $1,193,289 | $1,156,274 | $27,296 | $9,719 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended June 30, 2016. 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 (000s) |
| Level 1 to Level 2 | $20,238 |
| Level 2 to Level 1 | $0 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| Amounts in thousands (except per-share amounts) | June 30, 2016 | |
| Assets | ||
| Investment in securities, at value (including securities loaned of $24,204) — See accompanying schedule: Unaffiliated issuers (cost $873,859) | $1,114,872 | |
| Fidelity Central Funds (cost $78,417) | 78,417 | |
| Total Investments (cost $952,276) | $1,193,289 | |
| Receivable for investments sold | 9,531 | |
| Receivable for fund shares sold | 528 | |
| Dividends receivable | 581 | |
| Distributions receivable from Fidelity Central Funds | 55 | |
| Other receivables | 35 | |
| Total assets | 1,204,019 | |
| Liabilities | ||
| Payable for investments purchased | $3,368 | |
| Payable for fund shares redeemed | 1,415 | |
| Accrued management fee | 509 | |
| Other affiliated payables | 184 | |
| Other payables and accrued expenses | 49 | |
| Collateral on securities loaned, at value | 22,776 | |
| Total liabilities | 28,301 | |
| Net Assets | $1,175,718 | |
| Net Assets consist of: | ||
| Paid in capital | $1,092,730 | |
| Distributions in excess of net investment income | (573) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (157,440) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 241,001 | |
| Net Assets | $1,175,718 | |
| Growth Discovery: | ||
| Net Asset Value, offering price and redemption price per share ($999,716 ÷ 40,851 shares) | $24.47 | |
| Class K: | ||
| Net Asset Value, offering price and redemption price per share ($176,002 ÷ 7,189 shares) | $24.48 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Amounts in thousands | Year ended June 30, 2016 | |
| Investment Income | ||
| Dividends | $9,196 | |
| Income from Fidelity Central Funds | 685 | |
| Total income | 9,881 | |
| Expenses | ||
| Management fee | ||
| Basic fee | $6,687 | |
| Performance adjustment | 171 | |
| Transfer agent fees | 1,866 | |
| Accounting and security lending fees | 398 | |
| Custodian fees and expenses | 40 | |
| Independent trustees' fees and expenses | 5 | |
| Registration fees | 61 | |
| Audit | 62 | |
| Legal | 6 | |
| Miscellaneous | 10 | |
| Total expenses before reductions | 9,306 | |
| Expense reductions | (50) | 9,256 |
| Net investment income (loss) | 625 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 20,127 | |
| Foreign currency transactions | (26) | |
| Futures contracts | 6 | |
| Total net realized gain (loss) | 20,107 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (43,045) | |
| Futures contracts | 281 | |
| Total change in net unrealized appreciation (depreciation) | (42,764) | |
| Net gain (loss) | (22,657) | |
| Net increase (decrease) in net assets resulting from operations | $(22,032) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended June 30, 2016 | Year ended June 30, 2015 |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $625 | $3,766 |
| Net realized gain (loss) | 20,107 | 108,634 |
| Change in net unrealized appreciation (depreciation) | (42,764) | (12,280) |
| Net increase (decrease) in net assets resulting from operations | (22,032) | 100,120 |
| Distributions to shareholders from net investment income | (1,789) | (1,605) |
| Distributions to shareholders from net realized gain | (555) | – |
| Total distributions | (2,344) | (1,605) |
| Share transactions - net increase (decrease) | (80,061) | (80,798) |
| Total increase (decrease) in net assets | (104,437) | 17,717 |
| Net Assets | ||
| Beginning of period | 1,280,155 | 1,262,438 |
| End of period | $1,175,718 | $1,280,155 |
| Other Information | ||
| Undistributed net investment income end of period | $– | $1,357 |
| Distributions in excess of net investment income end of period | $(573) | $– |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Growth Discovery Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $24.93 | $23.07 | $17.45 | $15.09 | $14.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .01 | .07 | .02 | .07 | .04 |
| Net realized and unrealized gain (loss) | (.43) | 1.81 | 5.63 | 2.35 | .26 |
| Total from investment operations | (.42) | 1.88 | 5.65 | 2.42 | .30 |
| Distributions from net investment income | (.03) | (.02) | (.02) | (.06) | (.03) |
| Distributions from net realized gain | (.01) | – | (.01) | – | (.06) |
| Total distributions | (.04) | (.02) | (.03) | (.06) | (.09) |
| Net asset value, end of period | $24.47 | $24.93 | $23.07 | $17.45 | $15.09 |
| Total ReturnB | (1.68)% | 8.17% | 32.40% | 16.09% | 2.07% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .78% | .77% | .81% | .88% | .81% |
| Expenses net of fee waivers, if any | .78% | .77% | .81% | .88% | .81% |
| Expenses net of all reductions | .78% | .77% | .81% | .87% | .80% |
| Net investment income (loss) | .03% | .27% | .10% | .42% | .27% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $1,000 | $1,078 | $1,072 | $767 | $875 |
| Portfolio turnover rateE | 57% | 51% | 70% | 62% | 74% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Growth Discovery Fund Class K
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $24.94 | $23.09 | $17.45 | $15.09 | $14.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .04 | .10 | .05 | .09 | .06 |
| Net realized and unrealized gain (loss) | (.43) | 1.82 | 5.63 | 2.36 | .26 |
| Total from investment operations | (.39) | 1.92 | 5.68 | 2.45 | .32 |
| Distributions from net investment income | (.06) | (.07) | (.04) | (.09) | (.06) |
| Distributions from net realized gain | (.01) | – | (.01) | – | (.06) |
| Total distributions | (.07) | (.07) | (.04)B | (.09) | (.11)C |
| Net asset value, end of period | $24.48 | $24.94 | $23.09 | $17.45 | $15.09 |
| Total ReturnD | (1.57)% | 8.32% | 32.62% | 16.28% | 2.27% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .66% | .64% | .68% | .72% | .64% |
| Expenses net of fee waivers, if any | .66% | .64% | .68% | .72% | .64% |
| Expenses net of all reductions | .65% | .64% | .67% | .71% | .63% |
| Net investment income (loss) | .16% | .40% | .24% | .58% | .44% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $176 | $202 | $190 | $137 | $144 |
| Portfolio turnover rateG | 57% | 51% | 70% | 62% | 74% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.04 per share is comprised of distributions from net investment income of $.036 and distributions from net realized gain of $.006 per share.
C Total distributions of $.11 per share is comprised of distributions from net investment income of $.058 and distributions from net realized gain of $.055 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Growth Discovery Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Growth Discovery and Class K 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of June 30, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. 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 fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, partnerships, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $284,013 |
| Gross unrealized depreciation | (44,315) |
| Net unrealized appreciation (depreciation) on securities | $239,698 |
| Tax Cost | $953,591 |
The tax-based components of distributable earnings as of period end were as follows:
| Capital loss carryforward | $(136,052) |
| Net unrealized appreciation (depreciation) on securities and other investments | $239,685 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2018 | $(136,052) |
The Fund intends to elect to defer to its next fiscal year $20,072 of capital losses recognized during the period November 1, 2015 to June 30, 2016.
The tax character of distributions paid was as follows:
| June 30, 2016 | June 30, 2015 | |
| Ordinary Income | $2,344 | $ 1,605 |
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. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end.
During the period the Fund recognized net realized gain (loss) of $6 and a change in net unrealized appreciation (depreciation) of $281 related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $652,282 and $751,010, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Growth Discovery as compared to its benchmark index, the Russell 3000 Growth Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .56% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
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 Growth Discovery. FIIOC receives an asset-based fee of Class K's average net assets. 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 | |
| Growth Discovery | $1,780 | .17 |
| Class K | 86 | .05 |
| $ 1,866 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $9 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 $2 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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. The value of securities loaned to FCM at period end was $2,815. 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 $489, including $26 from securities loaned to FCM.
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 $40 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 $10.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Growth Discovery | $1,330 | $1,051 |
| Class K | 459 | 554 |
| Total | $1,789 | $1,605 |
| From net realized gain | ||
| Growth Discovery | $471 | $– |
| Class K | 84 | – |
| Total | $555 | $– |
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 | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Growth Discovery | ||||
| Shares sold | 5,290 | 6,606 | $128,658 | $156,958 |
| Reinvestment of distributions | 68 | 43 | 1,697 | 996 |
| Shares redeemed | (7,766) | (9,855) | (188,307) | (234,518) |
| Net increase (decrease) | (2,408) | (3,206) | $(57,952) | $(76,564) |
| Class K | ||||
| Shares sold | 1,980 | 2,148 | $48,709 | $51,064 |
| Reinvestment of distributions | 22 | 24 | 543 | 554 |
| Shares redeemed | (2,901) | (2,328) | (71,361) | (55,852) |
| Net increase (decrease) | (899) | (156) | $(22,109) | $(4,234) |
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Growth Discovery Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Growth Discovery Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Growth Discovery Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Melissa M. Reilly (1971)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Ms. Reilly also serves as Vice President of other funds. Ms. Reilly is an employee of Fidelity Investments (2004-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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 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 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.
| Annualized Expense Ratio-A | Beginning Account Value January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Growth Discovery | .78% | |||
| Actual | $1,000.00 | $968.30 | $3.82 | |
| Hypothetical-C | $1,000.00 | $1,020.98 | $3.92 | |
| Class K | .66% | |||
| Actual | $1,000.00 | $969.10 | $3.23 | |
| Hypothetical-C | $1,000.00 | $1,021.58 | $3.32 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
Growth Discovery and Class K designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Growth Discovery and Class K designates 100% of the dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
CII-ANN-0816
1.705796.118
Fidelity Advisor® Series Growth & Income Fund Annual Report June 30, 2016 |
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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 1-877-208-0098 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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Life of fundA |
| Fidelity Advisor® Series Growth & Income Fund | (2.75)% | 11.03% |
A From December 6, 2012
Prior to August 1, 2013, the fund was named Fidelity Advisor® Series Mega Cap Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Series Growth & Income Fund on December 6, 2012, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $14,523 | Fidelity Advisor® Series Growth & Income Fund | |
| $16,005 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and the U.K.'s relationship with the European Union– dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Fed’s rate-tightening posture. However, the U.K.’s late-June vote in favor of exiting the EU resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, with the Russell 2000® Index returning -6.73%. The tech-heavy Nasdaq Composite Index® returned -1.68%, as major constituent Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted traditionally defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager Matthew Fruhan: For the year, the fund returned -2.75%, trailing the 3.99% gain of the benchmark S&P 500® index. Versus the benchmark, the fund was hurt most by weak stock selection in the financials sector. We were overweight various financial institutions that struggled as interest rates fell, which makes their lending less profitable. Notable relative detractors from this sector included Bank of America, State Street, Citigroup, JPMorgan Chase and Morgan Stanley, along with KKR, an alternative asset manager and non-benchmark stock that faced business challenges amid volatile financial markets. The fund’s biggest individual detractor was not holding benchmark component and online retailer Amazon.com, whose shares were up 65% this period. Amazon continued to strike me as a good business but not a good investment at its lofty valuation. On the positive side, security selection in health care contributed, especially largely avoiding biotechnology company Gilead Sciences and not owning pharmaceuticals company Allergan, two poor-performing benchmark components that did not meet my criteria. Conversely, the fund’s top individual contributor was General Electric, which continued to divest its financial services businesses and return to its roots as an industrial company.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| JPMorgan Chase & Co. | 3.5 | 4.2 |
| General Electric Co.(a) | 3.3 | 3.8 |
| Microsoft Corp. | 3.1 | 3.3 |
| Bank of America Corp. | 2.6 | 2.9 |
| Apple, Inc. | 2.6 | 3.1 |
| Chevron Corp.(a) | 2.5 | 2.2 |
| Johnson & Johnson(a) | 2.4 | 2.1 |
| Procter & Gamble Co.(a) | 2.4 | 2.2 |
| Citigroup, Inc. | 2.3 | 2.6 |
| Qualcomm, Inc. | 1.9 | 1.9 |
| 26.6 |
(a) Security or a portion of the security is pledged as collateral for call options written.
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Financials | 20.5 | 22.1 |
| Information Technology | 19.9 | 21.0 |
| Health Care | 14.2 | 12.3 |
| Industrials | 12.6 | 13.0 |
| Energy | 12.5 | 9.6 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016 *,** | ||
| Stocks | 98.1% | |
| Convertible Securities | 1.5% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.4% | |
* Foreign investments - 11.4%
** Written Options - (0.1)%
| As of December 31, 2015 *,** | ||
| Stocks | 98.2% | |
| Convertible Securities | 1.1% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.7% | |
* Foreign investments - 12.0%
** Written Options - 0.0%
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 98.1% | |||
| Shares | Value | ||
| CONSUMER DISCRETIONARY - 8.4% | |||
| Auto Components - 0.3% | |||
| BorgWarner, Inc. | 63,600 | $1,877,472 | |
| Johnson Controls, Inc. | 26,800 | 1,186,168 | |
| 3,063,640 | |||
| Automobiles - 0.2% | |||
| General Motors Co. | 49,100 | 1,389,530 | |
| Harley-Davidson, Inc. | 14,400 | 652,320 | |
| 2,041,850 | |||
| Diversified Consumer Services - 0.0% | |||
| H&R Block, Inc. | 18,700 | 430,100 | |
| Hotels, Restaurants & Leisure - 0.7% | |||
| Cedar Fair LP (depositary unit) | 3,000 | 173,460 | |
| Dunkin' Brands Group, Inc. | 33,000 | 1,439,460 | |
| Las Vegas Sands Corp. | 37,500 | 1,630,875 | |
| Whitbread PLC | 16,004 | 748,816 | |
| Wingstop, Inc. | 4,000 | 109,000 | |
| Yum! Brands, Inc. (a) | 48,901 | 4,054,871 | |
| 8,156,482 | |||
| Leisure Products - 0.1% | |||
| NJOY, Inc. (b)(c) | 121,929 | 4,914 | |
| Polaris Industries, Inc. | 17,400 | 1,422,624 | |
| 1,427,538 | |||
| Media - 4.3% | |||
| Comcast Corp. Class A (a) | 304,190 | 19,830,146 | |
| Scripps Networks Interactive, Inc. Class A | 95,150 | 5,924,991 | |
| Sinclair Broadcast Group, Inc. Class A | 58,071 | 1,734,000 | |
| Time Warner, Inc. | 189,141 | 13,909,429 | |
| Viacom, Inc. Class B (non-vtg.) | 143,300 | 5,942,651 | |
| 47,341,217 | |||
| Multiline Retail - 1.4% | |||
| Target Corp. (a) | 212,963 | 14,869,077 | |
| Specialty Retail - 1.3% | |||
| Foot Locker, Inc. | 21,800 | 1,195,948 | |
| L Brands, Inc. | 21,800 | 1,463,434 | |
| Lowe's Companies, Inc. | 146,377 | 11,588,667 | |
| 14,248,049 | |||
| Textiles, Apparel & Luxury Goods - 0.1% | |||
| Ralph Lauren Corp. | 14,700 | 1,317,414 | |
| TOTAL CONSUMER DISCRETIONARY | 92,895,367 | ||
| CONSUMER STAPLES - 6.9% | |||
| Beverages - 2.2% | |||
| Britvic PLC | 30,700 | 240,235 | |
| Diageo PLC | 169,190 | 4,726,435 | |
| PepsiCo, Inc. | 32,294 | 3,421,226 | |
| The Coca-Cola Co. (a) | 342,048 | 15,505,036 | |
| 23,892,932 | |||
| Food & Staples Retailing - 1.1% | |||
| CVS Health Corp. | 90,490 | 8,663,513 | |
| Walgreens Boots Alliance, Inc. | 39,738 | 3,308,983 | |
| 11,972,496 | |||
| Food Products - 0.2% | |||
| Mead Johnson Nutrition Co. Class A | 29,500 | 2,677,125 | |
| Household Products - 2.4% | |||
| Procter & Gamble Co. (a) | 306,117 | 25,918,926 | |
| Personal Products - 0.1% | |||
| Edgewell Personal Care Co. (b) | 17,900 | 1,510,939 | |
| Tobacco - 0.9% | |||
| British American Tobacco PLC sponsored ADR | 17,285 | 2,238,062 | |
| Imperial Tobacco Group PLC | 20,606 | 1,117,521 | |
| Philip Morris International, Inc. | 61,187 | 6,223,942 | |
| 9,579,525 | |||
| TOTAL CONSUMER STAPLES | 75,551,943 | ||
| ENERGY - 12.4% | |||
| Energy Equipment & Services - 1.3% | |||
| Baker Hughes, Inc. | 56,800 | 2,563,384 | |
| Helmerich & Payne, Inc. | 21,900 | 1,470,147 | |
| National Oilwell Varco, Inc. | 103,800 | 3,492,870 | |
| Oceaneering International, Inc. | 117,000 | 3,493,620 | |
| Schlumberger Ltd. | 38,420 | 3,038,254 | |
| 14,058,275 | |||
| Oil, Gas & Consumable Fuels - 11.1% | |||
| Amyris, Inc. (b)(d) | 33,644 | 15,157 | |
| Anadarko Petroleum Corp. | 21,900 | 1,166,175 | |
| Apache Corp. | 145,547 | 8,102,601 | |
| Cabot Oil & Gas Corp. | 38,900 | 1,001,286 | |
| Cenovus Energy, Inc. | 447,200 | 6,185,583 | |
| Chevron Corp. (a) | 259,988 | 27,254,542 | |
| ConocoPhillips Co. | 260,500 | 11,357,800 | |
| Energy Transfer Equity LP | 73,100 | 1,050,447 | |
| EQT Midstream Partners LP | 9,100 | 730,730 | |
| Golar LNG Ltd. (d) | 97,800 | 1,515,900 | |
| Imperial Oil Ltd. | 259,000 | 8,195,302 | |
| Kinder Morgan, Inc. | 500,500 | 9,369,360 | |
| Legacy Reserves LP | 175,000 | 283,500 | |
| MPLX LP | 29,240 | 983,341 | |
| PrairieSky Royalty Ltd. (d) | 124,160 | 2,356,440 | |
| Suncor Energy, Inc. | 627,290 | 17,401,659 | |
| Teekay LNG Partners LP | 87,600 | 985,500 | |
| The Williams Companies, Inc. | 535,474 | 11,582,303 | |
| Williams Partners LP | 349,680 | 12,112,915 | |
| 121,650,541 | |||
| TOTAL ENERGY | 135,708,816 | ||
| FINANCIALS - 20.5% | |||
| Banks - 13.7% | |||
| Bank of America Corp. | 2,137,637 | 28,366,443 | |
| Citigroup, Inc. | 592,231 | 25,104,672 | |
| Citizens Financial Group, Inc. | 11,100 | 221,778 | |
| Comerica, Inc. | 127,300 | 5,235,849 | |
| Cullen/Frost Bankers, Inc. | 14,200 | 904,966 | |
| Fifth Third Bancorp | 76,000 | 1,336,840 | |
| JPMorgan Chase & Co. | 626,098 | 38,905,727 | |
| Lloyds Banking Group PLC | 294,600 | 213,376 | |
| M&T Bank Corp. | 45,900 | 5,426,757 | |
| PNC Financial Services Group, Inc. | 62,144 | 5,057,900 | |
| Regions Financial Corp. | 816,900 | 6,951,819 | |
| Standard Chartered PLC (United Kingdom) | 235,402 | 1,785,989 | |
| SunTrust Banks, Inc. | 314,950 | 12,938,146 | |
| U.S. Bancorp | 322,871 | 13,021,387 | |
| Wells Fargo & Co. | 104,500 | 4,945,985 | |
| 150,417,634 | |||
| Capital Markets - 4.8% | |||
| Apollo Global Management LLC Class A | 112,500 | 1,704,375 | |
| Ashmore Group PLC (d) | 203,800 | 811,465 | |
| Charles Schwab Corp. | 193,854 | 4,906,445 | |
| Franklin Resources, Inc. | 15,700 | 523,909 | |
| Goldman Sachs Group, Inc. | 3,900 | 579,462 | |
| Invesco Ltd. | 80,000 | 2,043,200 | |
| KKR & Co. LP | 418,278 | 5,161,551 | |
| Morgan Stanley | 258,380 | 6,712,712 | |
| Northern Trust Corp. | 164,710 | 10,913,685 | |
| Oaktree Capital Group LLC Class A | 43,800 | 1,960,488 | |
| State Street Corp. | 251,174 | 13,543,302 | |
| The Blackstone Group LP | 171,400 | 4,206,156 | |
| 53,066,750 | |||
| Diversified Financial Services - 0.4% | |||
| FactSet Research Systems, Inc. | 3,300 | 532,686 | |
| S&P Global, Inc. | 33,000 | 3,539,580 | |
| 4,072,266 | |||
| Insurance - 0.9% | |||
| Chubb Ltd. | 1,200 | 156,852 | |
| Marsh & McLennan Companies, Inc. | 67,619 | 4,629,197 | |
| MetLife, Inc. | 70,439 | 2,805,585 | |
| Principal Financial Group, Inc. | 46,100 | 1,895,171 | |
| 9,486,805 | |||
| Real Estate Investment Trusts - 0.5% | |||
| American Tower Corp. | 13,900 | 1,579,179 | |
| Crown Castle International Corp. | 29,000 | 2,941,470 | |
| First Potomac Realty Trust | 9,879 | 90,887 | |
| Sabra Health Care REIT, Inc. | 35,300 | 728,416 | |
| 5,339,952 | |||
| Thrifts & Mortgage Finance - 0.2% | |||
| MGIC Investment Corp. (b) | 62,400 | 371,280 | |
| Radian Group, Inc. | 192,252 | 2,003,266 | |
| 2,374,546 | |||
| TOTAL FINANCIALS | 224,757,953 | ||
| HEALTH CARE - 13.2% | |||
| Biotechnology - 2.8% | |||
| AbbVie, Inc. | 116,300 | 7,200,133 | |
| Amgen, Inc. | 57,165 | 8,697,655 | |
| Biogen, Inc. (b) | 26,300 | 6,359,866 | |
| Celgene Corp. (b) | 23,000 | 2,268,490 | |
| Gilead Sciences, Inc. | 19,600 | 1,635,032 | |
| Intercept Pharmaceuticals, Inc. (b) | 7,700 | 1,098,636 | |
| Shire PLC sponsored ADR | 20,700 | 3,810,456 | |
| 31,070,268 | |||
| Health Care Equipment & Supplies - 2.4% | |||
| Abbott Laboratories | 134,791 | 5,298,634 | |
| Ansell Ltd. | 82,071 | 1,123,227 | |
| Becton, Dickinson & Co. | 4,800 | 814,032 | |
| Medtronic PLC | 154,568 | 13,411,865 | |
| Zimmer Biomet Holdings, Inc. | 47,500 | 5,718,050 | |
| 26,365,808 | |||
| Health Care Providers & Services - 1.4% | |||
| Cigna Corp. | 15,700 | 2,009,443 | |
| McKesson Corp. | 54,025 | 10,083,766 | |
| Patterson Companies, Inc. | 56,577 | 2,709,473 | |
| 14,802,682 | |||
| Life Sciences Tools & Services - 0.5% | |||
| Agilent Technologies, Inc. | 110,400 | 4,897,344 | |
| Pharmaceuticals - 6.1% | |||
| Bayer AG | 1,900 | 190,826 | |
| Bristol-Myers Squibb Co. | 37,600 | 2,765,480 | |
| GlaxoSmithKline PLC sponsored ADR | 455,340 | 19,734,436 | |
| Innoviva, Inc. | 51,600 | 543,348 | |
| Johnson & Johnson (a) | 219,474 | 26,622,196 | |
| Novartis AG sponsored ADR | 4,832 | 398,688 | |
| Sanofi SA | 45,123 | 3,748,942 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 267,949 | 13,459,078 | |
| 67,462,994 | |||
| TOTAL HEALTH CARE | 144,599,096 | ||
| INDUSTRIALS - 12.4% | |||
| Aerospace & Defense - 2.1% | |||
| General Dynamics Corp. | 4,100 | 570,884 | |
| Meggitt PLC | 44,473 | 241,730 | |
| Rolls-Royce Group PLC | 193,900 | 1,850,770 | |
| The Boeing Co. | 95,279 | 12,373,884 | |
| United Technologies Corp. | 80,920 | 8,298,346 | |
| 23,335,614 | |||
| Air Freight & Logistics - 2.2% | |||
| C.H. Robinson Worldwide, Inc. | 47,100 | 3,497,175 | |
| PostNL NV (b) | 792,800 | 3,234,044 | |
| United Parcel Service, Inc. Class B (a) | 158,870 | 17,113,476 | |
| 23,844,695 | |||
| Airlines - 0.2% | |||
| Copa Holdings SA Class A | 41,800 | 2,184,468 | |
| Building Products - 0.1% | |||
| Lennox International, Inc. | 4,000 | 570,400 | |
| Commercial Services & Supplies - 0.1% | |||
| KAR Auction Services, Inc. | 32,100 | 1,339,854 | |
| Electrical Equipment - 0.9% | |||
| AMETEK, Inc. | 11,700 | 540,891 | |
| Eaton Corp. PLC | 19,100 | 1,140,843 | |
| Emerson Electric Co. | 90,500 | 4,720,480 | |
| Hubbell, Inc. Class B | 35,337 | 3,726,993 | |
| 10,129,207 | |||
| Industrial Conglomerates - 3.3% | |||
| General Electric Co. (a) | 1,147,566 | 36,125,378 | |
| Machinery - 0.7% | |||
| Caterpillar, Inc. | 3,800 | 288,078 | |
| CLARCOR, Inc. | 4,500 | 273,735 | |
| Deere & Co. | 39,800 | 3,225,392 | |
| Donaldson Co., Inc. | 48,400 | 1,663,024 | |
| IMI PLC | 14,200 | 184,022 | |
| Pentair PLC | 5,800 | 338,082 | |
| Wabtec Corp. | 14,900 | 1,046,427 | |
| Xylem, Inc. | 23,200 | 1,035,880 | |
| 8,054,640 | |||
| Professional Services - 0.1% | |||
| Nielsen Holdings PLC | 17,400 | 904,278 | |
| Road & Rail - 2.2% | |||
| CSX Corp. | 312,212 | 8,142,489 | |
| J.B. Hunt Transport Services, Inc. | 91,565 | 7,410,355 | |
| Kansas City Southern | 34,700 | 3,126,123 | |
| Norfolk Southern Corp. | 33,680 | 2,867,178 | |
| Union Pacific Corp. | 28,000 | 2,443,000 | |
| 23,989,145 | |||
| Trading Companies & Distributors - 0.5% | |||
| MSC Industrial Direct Co., Inc. Class A | 12,300 | 867,888 | |
| W.W. Grainger, Inc. (d) | 3,100 | 704,475 | |
| Watsco, Inc. | 30,451 | 4,284,151 | |
| 5,856,514 | |||
| TOTAL INDUSTRIALS | 136,334,193 | ||
| INFORMATION TECHNOLOGY - 19.8% | |||
| Communications Equipment - 1.6% | |||
| Cisco Systems, Inc. | 627,740 | 18,009,861 | |
| Internet Software & Services - 2.9% | |||
| Alphabet, Inc.: | |||
| Class A | 24,359 | 17,137,287 | |
| Class C (b) | 21,034 | 14,557,631 | |
| 31,694,918 | |||
| IT Services - 5.1% | |||
| First Data Corp. (e) | 288,342 | 3,191,946 | |
| First Data Corp. Class A (b) | 43,900 | 485,973 | |
| IBM Corp. | 76,774 | 11,652,758 | |
| MasterCard, Inc. Class A | 117,950 | 10,386,677 | |
| Paychex, Inc. (a) | 224,714 | 13,370,483 | |
| Sabre Corp. | 29,700 | 795,663 | |
| Unisys Corp. (b)(d) | 177,600 | 1,292,928 | |
| Visa, Inc. Class A | 207,280 | 15,373,958 | |
| 56,550,386 | |||
| Semiconductors & Semiconductor Equipment - 2.4% | |||
| Maxim Integrated Products, Inc. | 94,400 | 3,369,136 | |
| Qualcomm, Inc. | 399,410 | 21,396,394 | |
| Xilinx, Inc. | 44,400 | 2,048,172 | |
| 26,813,702 | |||
| Software - 3.6% | |||
| Microsoft Corp. | 662,908 | 33,921,002 | |
| Oracle Corp. | 95,813 | 3,921,626 | |
| SS&C Technologies Holdings, Inc. | 43,100 | 1,210,248 | |
| 39,052,876 | |||
| Technology Hardware, Storage & Peripherals - 4.2% | |||
| Apple, Inc. | 293,006 | 28,011,374 | |
| EMC Corp. | 441,200 | 11,987,404 | |
| Western Digital Corp. | 118,000 | 5,576,680 | |
| 45,575,458 | |||
| TOTAL INFORMATION TECHNOLOGY | 217,697,201 | ||
| MATERIALS - 2.7% | |||
| Chemicals - 2.2% | |||
| CF Industries Holdings, Inc. | 66,800 | 1,609,880 | |
| E.I. du Pont de Nemours & Co. | 53,930 | 3,494,664 | |
| Johnson Matthey PLC | 3,000 | 112,522 | |
| LyondellBasell Industries NV Class A | 33,000 | 2,455,860 | |
| Monsanto Co. | 123,714 | 12,793,265 | |
| Potash Corp. of Saskatchewan, Inc. | 268,510 | 4,364,496 | |
| 24,830,687 | |||
| Containers & Packaging - 0.5% | |||
| Ball Corp. | 11,700 | 845,793 | |
| International Paper Co. | 4,700 | 199,186 | |
| Packaging Corp. of America | 12,100 | 809,853 | |
| WestRock Co. | 83,800 | 3,257,306 | |
| 5,112,138 | |||
| TOTAL MATERIALS | 29,942,825 | ||
| TELECOMMUNICATION SERVICES - 0.9% | |||
| Diversified Telecommunication Services - 0.9% | |||
| Verizon Communications, Inc. | 178,759 | 9,981,903 | |
| UTILITIES - 0.9% | |||
| Electric Utilities - 0.9% | |||
| Exelon Corp. | 259,000 | 9,417,240 | |
| PPL Corp. | 1,400 | 52,850 | |
| 9,470,090 | |||
| Multi-Utilities - 0.0% | |||
| Sempra Energy | 600 | 68,412 | |
| TOTAL UTILITIES | 9,538,502 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $992,423,279) | 1,077,007,799 | ||
| Preferred Stocks - 1.2% | |||
| Convertible Preferred Stocks - 1.2% | |||
| HEALTH CARE - 1.0% | |||
| Health Care Equipment & Supplies - 1.0% | |||
| Alere, Inc. 3.00% | 31,787 | 10,593,018 | |
| INDUSTRIALS - 0.2% | |||
| Commercial Services & Supplies - 0.2% | |||
| Stericycle, Inc. 2.25% | 24,200 | 2,012,956 | |
| UTILITIES - 0.0% | |||
| Independent Power and Renewable Electricity Producers - 0.0% | |||
| Dynegy, Inc. 7.00% (b) | 4,900 | 527,828 | |
| TOTAL CONVERTIBLE PREFERRED STOCKS | 13,133,802 | ||
| Nonconvertible Preferred Stocks - 0.0% | |||
| INDUSTRIALS - 0.0% | |||
| Aerospace & Defense - 0.0% | |||
| Rolls-Royce Group PLC | 13,113,700 | 17,458 | |
| Rolls-Royce Group PLC (C Shares) (b) | 6,034,770 | 8,034 | |
| 25,492 | |||
| TOTAL PREFERRED STOCKS | |||
| (Cost $11,403,275) | 13,159,294 | ||
| Principal Amount | Value | ||
| Convertible Bonds - 0.3% | |||
| CONSUMER DISCRETIONARY - 0.1% | |||
| Automobiles - 0.1% | |||
| Tesla Motors, Inc. 1.25% 3/1/21 | 1,010,000 | 830,094 | |
| ENERGY - 0.1% | |||
| Oil, Gas & Consumable Fuels - 0.1% | |||
| Amyris, Inc.: | |||
| 5% 10/15/18 (c) | 849,934 | 748,775 | |
| 9.5% 4/15/19 (e) | 741,000 | 350,123 | |
| Peabody Energy Corp. 4.75% 12/15/41 (f) | 1,640,000 | 8,200 | |
| 1,107,098 | |||
| INFORMATION TECHNOLOGY - 0.1% | |||
| Internet Software & Services - 0.1% | |||
| Twitter, Inc. 0.25% 9/15/19 | 1,610,000 | 1,475,163 | |
| TOTAL CONVERTIBLE BONDS | |||
| (Cost $5,289,579) | 3,412,355 | ||
| Shares | Value | ||
| Money Market Funds - 0.5% | |||
| Fidelity Cash Central Fund, 0.43% (g) | 1,662,961 | 1,662,961 | |
| Fidelity Securities Lending Cash Central Fund, 0.46% (g)(h) | 4,063,925 | 4,063,925 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $5,726,886) | 5,726,886 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.1% | |||
| (Cost $1,014,843,019) | 1,099,306,334 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.1)% | (1,589,425) | ||
| NET ASSETS - 100% | $1,097,716,909 |
| Written Options | ||||
| Expiration Date/Exercise Price | Number of Contracts | Premium | Value | |
| Call Options | ||||
| Chevron Corp. | 9/16/16 - $110.00 | 391 | $37,926 | $(41,837) |
| Comcast Corp. Class A | 10/21/16 - $67.50 | 458 | 42,135 | (61,143) |
| General Electric Co. | 9/16/16 - $32.00 | 2,308 | 124,629 | (156,944) |
| Johnson & Johnson | 7/15/16 - $120.00 | 342 | 11,628 | (65,664) |
| Paychex, Inc. | 9/16/16 - $57.50 | 707 | 52,317 | (187,355) |
| Procter & Gamble Co. | 7/15/16 - $85.00 | 797 | 17,534 | (47,023) |
| Target Corp. | 7/15/16 - $87.50 | 391 | 57,632 | (391) |
| The Coca-Cola Co. | 7/15/16 - $48.00 | 362 | 5,792 | (543) |
| United Parcel Service, Inc. Class B | 10/21/16 - $105.00 | 234 | 99,620 | (113,490) |
| Yum! Brands, Inc. | 7/15/16 - $87.50 | 489 | 111,978 | (24,450) |
| TOTAL WRITTEN OPTIONS | $561,191 | $(698,840) |
Legend
(a) Security or a portion of the security is pledged as collateral for call options written. At period end, the value of securities pledged amounted to $40,399,792.
(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 $753,689 or 0.1% of net assets.
(d) Security or a portion of the security is on loan at period end.
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $3,542,069 or 0.3% of net assets.
(f) Non-income producing - Security is in default.
(g) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(h) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| Amyris, Inc. 5% 10/15/18 | 10/16/13 - 4/15/16 | $849,934 |
| NJOY, Inc. | 2/14/14 | $211,475 |
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 | $11,782 |
| Fidelity Securities Lending Cash Central Fund | 126,632 |
| Total | $138,414 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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: | ||||
| Equities: | ||||
| Consumer Discretionary | $92,895,367 | $92,141,637 | $748,816 | $4,914 |
| Consumer Staples | 75,551,943 | 69,467,752 | 6,084,191 | -- |
| Energy | 135,708,816 | 135,708,816 | -- | -- |
| Financials | 224,757,953 | 221,947,123 | 2,810,830 | -- |
| Health Care | 155,192,114 | 139,536,101 | 15,656,013 | -- |
| Industrials | 138,372,641 | 132,862,075 | 5,510,566 | -- |
| Information Technology | 217,697,201 | 217,697,201 | -- | -- |
| Materials | 29,942,825 | 29,830,303 | 112,522 | -- |
| Telecommunication Services | 9,981,903 | 9,981,903 | -- | -- |
| Utilities | 10,066,330 | 10,066,330 | -- | -- |
| Corporate Bonds | 3,412,355 | -- | 3,412,355 | -- |
| Money Market Funds | 5,726,886 | 5,726,886 | -- | -- |
| Total Investments in Securities: | $1,099,306,334 | $1,064,966,127 | $34,335,293 | $4,914 |
| Derivative Instruments: | ||||
| Liabilities | ||||
| Written Options | $(698,840) | $(698,449) | $(391) | $-- |
| Total Liabilities | $(698,840) | $(698,449) | $(391) | $-- |
| Total Derivative Instruments: | $(698,840) | $(698,449) | $(391) | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended June 30, 2016. 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 | $30,410,119 |
| Level 2 to Level 1 | $0 |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2016. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value | |
| Asset | Liability | |
| Equity Risk | ||
| Written Options(a) | $0 | $(698,840) |
| Total Equity Risk | 0 | (698,840) |
| Total Value of Derivatives | $0 | $(698,840) |
(a) Gross value is presented in the Statement of Assets and Liabilities in the written options, at value line-item.
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 | 88.6% |
| Canada | 3.5% |
| United Kingdom | 3.3% |
| Ireland | 1.3% |
| Israel | 1.2% |
| Others (Individually Less Than 1%) | 2.1% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| June 30, 2016 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $3,937,318) — See accompanying schedule: Unaffiliated issuers (cost $1,009,116,133) | $1,093,579,448 | |
| Fidelity Central Funds (cost $5,726,886) | 5,726,886 | |
| Total Investments (cost $1,014,843,019) | $1,099,306,334 | |
| Foreign currency held at value (cost $117,341) | 117,341 | |
| Receivable for investments sold | 8,763,544 | |
| Receivable for fund shares sold | 32,280 | |
| Dividends receivable | 1,669,915 | |
| Interest receivable | 29,274 | |
| Distributions receivable from Fidelity Central Funds | 11,282 | |
| Other receivables | 7,934 | |
| Total assets | 1,109,937,904 | |
| Liabilities | ||
| Payable for investments purchased | $2,880,808 | |
| Payable for fund shares redeemed | 3,922,901 | |
| Accrued management fee | 414,225 | |
| Written options, at value (premium received $561,191) | 698,840 | |
| Other affiliated payables | 194,749 | |
| Other payables and accrued expenses | 45,547 | |
| Collateral on securities loaned, at value | 4,063,925 | |
| Total liabilities | 12,220,995 | |
| Net Assets | $1,097,716,909 | |
| Net Assets consist of: | ||
| Paid in capital | $1,021,532,693 | |
| Undistributed net investment income | 1,963,318 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (10,096,242) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 84,317,140 | |
| Net Assets, for 88,146,568 shares outstanding | $1,097,716,909 | |
| Net Asset Value, offering price and redemption price per share ($1,097,716,909 ÷ 88,146,568 shares) | $12.45 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended June 30, 2016 | ||
| Investment Income | ||
| Dividends | $28,840,899 | |
| Interest | 240,542 | |
| Income from Fidelity Central Funds | 138,414 | |
| Total income | 29,219,855 | |
| Expenses | ||
| Management fee | $5,182,650 | |
| Transfer agent fees | 2,048,855 | |
| Accounting and security lending fees | 376,698 | |
| Custodian fees and expenses | 78,736 | |
| Independent trustees' fees and expenses | 5,150 | |
| Audit | 52,202 | |
| Legal | 3,761 | |
| Interest | 4,150 | |
| Miscellaneous | 8,856 | |
| Total expenses before reductions | 7,761,058 | |
| Expense reductions | (37,150) | 7,723,908 |
| Net investment income (loss) | 21,495,947 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 4,213,840 | |
| Foreign currency transactions | (15,734) | |
| Written options | 865,021 | |
| Total net realized gain (loss) | 5,063,127 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (58,918,747) | |
| Assets and liabilities in foreign currencies | (6,534) | |
| Written options | (137,649) | |
| Total change in net unrealized appreciation (depreciation) | (59,062,930) | |
| Net gain (loss) | (53,999,803) | |
| Net increase (decrease) in net assets resulting from operations | $(32,503,856) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $21,495,947 | $23,872,019 |
| Net realized gain (loss) | 5,063,127 | 60,467,911 |
| Change in net unrealized appreciation (depreciation) | (59,062,930) | (14,071,275) |
| Net increase (decrease) in net assets resulting from operations | (32,503,856) | 70,268,655 |
| Distributions to shareholders from net investment income | (22,858,947) | (22,269,148) |
| Distributions to shareholders from net realized gain | (58,610,461) | (47,511,266) |
| Total distributions | (81,469,408) | (69,780,414) |
| Share transactions | ||
| Proceeds from sales of shares | 142,429,892 | 113,636,273 |
| Reinvestment of distributions | 81,469,408 | 69,780,414 |
| Cost of shares redeemed | (286,985,503) | (266,983,046) |
| Net increase (decrease) in net assets resulting from share transactions | (63,086,203) | (83,566,359) |
| Total increase (decrease) in net assets | (177,059,467) | (83,078,118) |
| Net Assets | ||
| Beginning of period | 1,274,776,376 | 1,357,854,494 |
| End of period | $1,097,716,909 | $1,274,776,376 |
| Other Information | ||
| Undistributed net investment income end of period | $1,963,318 | $4,996,141 |
| Shares | ||
| Sold | 11,644,177 | 8,362,947 |
| Issued in reinvestment of distributions | 6,393,573 | 5,206,880 |
| Redeemed | (22,877,424) | (19,477,685) |
| Net increase (decrease) | (4,839,674) | (5,907,858) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Series Growth & Income Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | ||||
| Net asset value, beginning of period | $13.71 | $13.73 | $11.57 | $10.00 |
| Income from Investment Operations | ||||
| Net investment income (loss)B | .23 | .25 | .23 | .08 |
| Net realized and unrealized gain (loss) | (.60) | .45 | 2.33 | 1.50 |
| Total from investment operations | (.37) | .70 | 2.56 | 1.58 |
| Distributions from net investment income | (.25) | (.23) | (.15) | (.01) |
| Distributions from net realized gain | (.64) | (.49) | (.25) | – |
| Total distributions | (.89) | (.72) | (.40) | (.01) |
| Net asset value, end of period | $12.45 | $13.71 | $13.73 | $11.57 |
| Total ReturnC,D | (2.75)% | 5.29% | 22.48% | 15.80% |
| Ratios to Average Net AssetsE,F | ||||
| Expenses before reductions | .67% | .67% | .69% | .84%G |
| Expenses net of fee waivers, if any | .67% | .67% | .69% | .84%G |
| Expenses net of all reductions | .67% | .67% | .69% | .83%G |
| Net investment income (loss) | 1.86% | 1.80% | 1.83% | 1.33%G |
| Supplemental Data | ||||
| Net assets, end of period (000 omitted) | $1,097,717 | $1,274,776 | $1,357,854 | $169,956 |
| Portfolio turnover rateH | 33% | 38% | 60%I | 50%G |
A For the period December 6, 2012 (commencement of operations) to June 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the 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. Expense ratios before reductions for start-up periods may not be representative of longer term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
1. Organization.
Fidelity Advisor Series Growth & Income Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. Shares of the Fund are only available for purchase by mutual funds for which Fidelity Management & Research Company (FMR) or an affiliate serves as an investment manager. 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.
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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the FMR Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price and are generally 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 June 30, 2016, including information on transfers between Levels 1 and 2 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income 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, market discount, partnerships, passive foreign investment companies (PFIC), certain conversion ratio adjustments, equity-debt classifications and losses deferred due to wash sales, options transactions and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $160,443,757 |
| Gross unrealized depreciation | (82,958,265) |
| Net unrealized appreciation (depreciation) on securities | $77,485,492 |
| Tax Cost | $1,021,820,842 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $7,830,187 |
| Net unrealized appreciation (depreciation) on securities and other investments | $77,338,957 |
At period end, the Fund was required to defer approximately $18,967 of losses on options. The Fund intends to elect to defer to its next fiscal year $5,173,308 of capital losses recognized during the period November 1, 2015 to June 30, 2016.
The tax character of distributions paid was as follows:
| June 30, 2016 | June 30, 2015 | |
| Ordinary Income | $28,511,863 | $ 53,939,771 |
| Long-term Capital Gains | 52,957,545 | 15,840,643 |
| Total | $81,469,408 | $ 69,780,414 |
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. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including options. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded options may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Options. Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price between or on certain dates. Options obligate the seller (writer) to buy (put) or sell (call) an underlying instrument at the exercise or strike price or cash settle an underlying derivative instrument if the holder exercises the option on or before the expiration date.
The Fund used exchange-traded written covered call options to manage its exposure to the market. When the Fund writes a covered call option, the Fund holds the underlying instrument which must be delivered to the holder upon the exercise of the option.
Upon entering into a written options contract, the Fund will receive a premium. Premiums received are reflected as a liability on the Statement of Assets and Liabilities. Options are valued daily and any unrealized appreciation (depreciation) is reflected on the Statement of Assets and Liabilities. When a written option is exercised, the premium is added to the proceeds from the sale of the underlying instrument in determining the gain or loss realized on that investment. When an option is closed the Fund will realize a gain or loss depending on whether the proceeds or amount paid for the closing sale transaction are greater or less than the premium received. When an option expires, gains and losses are realized to the extent of premiums received. The net realized gain (loss) on closed and expired written options and the change in net unrealized appreciation (depreciation) on written options are reflected separately on the Statement of Operations.
Writing call options tends to decrease exposure to the underlying instrument and risk of loss is the change in value in excess of the premium received.
Any open options at period end are presented in the Schedule of Investments under the caption "Written Options".
During the period, the Fund recognized net realized gain (loss) of $865,021 and a change in net unrealized appreciation (depreciation) of $(137,649) related to its investment in written options. This amount is included in the Statement of Operations.
The following is a summary of the Fund's written options activity:
| Written Options | Number of Contracts | Amount of Premiums |
| Outstanding at beginning of period | - | $- |
| Options Opened | 24,091 | 1,638,699 |
| Options Exercised | (2,169) | (164,702) |
| Options Closed | (8,776) | (379,289) |
| Options Expired | (6,667) | (533,517) |
| Outstanding at end of period | 6,479 | $561,191 |
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $386,378,493 and $510,192,080, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (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 .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .45% 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 annual 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.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $8,878 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $7,941,450 | .47% | $4,150 |
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.
Other. During the period, the investment advisor reimbursed the Fund for certain losses in the amount of $12,744.
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 $1,819 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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 $126,632. During the period, there were no securities loaned to FCM.
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 $27,799 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $9,351.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, mutual funds managed by the investment adviser or its affiliates were the owners of record of all of the outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Advisor Series Growth & Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Advisor Series Growth & Income Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Advisor Series Growth & Income Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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. 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. 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.
| Annualized Expense Ratio-A | Beginning Account Value January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Actual | .67% | $1,000.00 | $1,012.60 | $3.35 |
| Hypothetical-C | $1,000.00 | $1,021.53 | $3.37 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Advisor Series Growth & Income Fund voted to pay on August 15, 2016, to shareholders of record at the opening of business on August 12, 2016, a distribution of $0.026 per share derived from capital gains realized from sales of portfolio securities.
The fund hereby designates as a capital gain dividend with respect to the taxable year ended June 30, 2016, $15,708,909, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.01% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund designates 57%, 57%, 92%, 100%, and 100% of the dividends distributed in July, August, October, December, and April, respectively during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
The fund designates 75%, 75%, 96%, 100%, and 100% of the dividends distributed in July, August, October, December, and April, respectively during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
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Fidelity® Fund Class K Annual Report June 30, 2016 |
|
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 1-800-835-5092 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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class K | (0.72)% | 10.04% | 6.88% |
The initial offering of Class K shares took place on May 9, 2008. Returns prior to May 9, 2008 are those of Fidelity® Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Fund - Class K on June 30, 2006. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period. See above for additional information regarding the performance of Class K.
| Period Ending Values | ||
| $19,459 | Fidelity® Fund - Class K | |
| $20,465 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and the U.K.’s relationship with the European Union – dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Fed’s rate-tightening posture. However, the U.K.’s late-June vote in favor of exiting the EU resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, as the Russell 2000® Index returned -6.73%. The Nasdaq Composite Index® returned -1.68%, as Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager John Avery: For the year, the fund’s share classes considerably trailed the S&P 500®. Versus that index, stock selection in health care, financials and consumer staples, along with largely avoiding telecommunication services and an underweighting in utilities, detracted from performance. Untimely positioning in PC-software maker Microsoft cost us the most relative to the benchmark. The stock enjoyed a robust rally in October 2015. I purchased the stock that same month but unfortunately missed most of the rally, and the shares treaded water for the remainder of the period. Other detractors included pharmaceutical stock Allergan and biotech holdingBiogen, the latter of which I liquidated in June. Fertilizer maker CF Industries Holdings, which I also sold, was hurt by a near-perfect growing season that led to a drop in corn’s price. Conversely, an underweighting in energy and stock selection in consumer discretionary added value. Among individual holdings, social media giant Facebook was the fund’s top relative contributor. Our investments here rose 32% for the period on continued growth in its user base and higher mobile advertising revenue. Facebook was our second-largest holding at period end. An out-of-benchmark stake in Danish biotechnology company Genmab also helped, as did an overweighting in online retailer Amazon.com.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Facebook, Inc. Class A | 3.3 | 3.2 |
| Berkshire Hathaway, Inc. Class B | 2.7 | 1.8 |
| Amazon.com, Inc. | 2.5 | 3.1 |
| Johnson & Johnson | 2.2 | 0.0 |
| Medtronic PLC | 2.2 | 1.7 |
| Amphenol Corp. Class A | 2.1 | 1.8 |
| Alphabet, Inc. Class A | 2.1 | 2.6 |
| Alphabet, Inc. Class C | 2.1 | 2.4 |
| Visa, Inc. Class A | 2.1 | 2.0 |
| CVS Health Corp. | 2.0 | 1.8 |
| 23.3 |
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Information Technology | 20.3 | 22.4 |
| Health Care | 14.3 | 13.3 |
| Consumer Staples | 13.6 | 9.8 |
| Consumer Discretionary | 12.5 | 14.8 |
| Financials | 11.9 | 18.3 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016* | ||
| Stocks | 98.0% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 2.0% | |
* Foreign investments - 8.3%
| As of December 31, 2015* | ||
| Stocks and Equity Futures | 99.3% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.7% | |
* Foreign investments - 9.8%
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 98.0% | |||
| Shares | Value (000s) | ||
| CONSUMER DISCRETIONARY - 12.5% | |||
| Diversified Consumer Services - 0.7% | |||
| ServiceMaster Global Holdings, Inc. (a) | 750,000 | $29,850 | |
| Hotels, Restaurants & Leisure - 3.1% | |||
| Domino's Pizza, Inc. | 271,400 | 35,657 | |
| Starbucks Corp. | 1,133,996 | 64,774 | |
| Vail Resorts, Inc. | 275,000 | 38,013 | |
| 138,444 | |||
| Internet & Catalog Retail - 2.5% | |||
| Amazon.com, Inc. (a) | 155,000 | 110,921 | |
| Media - 1.9% | |||
| Comcast Corp. Class A | 1,170,700 | 76,318 | |
| Lions Gate Entertainment Corp. (b) | 400,000 | 8,092 | |
| 84,410 | |||
| Specialty Retail - 3.9% | |||
| AutoZone, Inc. (a) | 72,300 | 57,395 | |
| Home Depot, Inc. | 500,000 | 63,845 | |
| L Brands, Inc. | 170,000 | 11,412 | |
| TJX Companies, Inc. | 558,800 | 43,156 | |
| 175,808 | |||
| Textiles, Apparel & Luxury Goods - 0.4% | |||
| NIKE, Inc. Class B | 348,200 | 19,221 | |
| TOTAL CONSUMER DISCRETIONARY | 558,654 | ||
| CONSUMER STAPLES - 13.6% | |||
| Beverages - 2.9% | |||
| Dr. Pepper Snapple Group, Inc. | 350,000 | 33,821 | |
| Molson Coors Brewing Co. Class B | 204,200 | 20,651 | |
| The Coca-Cola Co. | 1,600,000 | 72,528 | |
| 127,000 | |||
| Food & Staples Retailing - 2.7% | |||
| Costco Wholesale Corp. | 200,000 | 31,408 | |
| CVS Health Corp. | 915,200 | 87,621 | |
| 119,029 | |||
| Food Products - 1.9% | |||
| Mead Johnson Nutrition Co. Class A | 250,000 | 22,688 | |
| Mondelez International, Inc. | 1,379,600 | 62,786 | |
| 85,474 | |||
| Household Products - 2.4% | |||
| Procter & Gamble Co. | 1,000,000 | 84,670 | |
| Spectrum Brands Holdings, Inc. (b) | 200,000 | 23,862 | |
| 108,532 | |||
| Personal Products - 1.0% | |||
| Estee Lauder Companies, Inc. Class A | 492,300 | 44,809 | |
| Tobacco - 2.7% | |||
| Altria Group, Inc. | 700,000 | 48,272 | |
| Imperial Tobacco Group PLC | 600,000 | 32,540 | |
| Reynolds American, Inc. | 750,000 | 40,448 | |
| 121,260 | |||
| TOTAL CONSUMER STAPLES | 606,104 | ||
| ENERGY - 5.7% | |||
| Energy Equipment & Services - 0.7% | |||
| Schlumberger Ltd. | 385,000 | 30,446 | |
| Oil, Gas & Consumable Fuels - 5.0% | |||
| Anadarko Petroleum Corp. | 435,650 | 23,198 | |
| Cheniere Energy Partners LP | 581,461 | 17,432 | |
| Chevron Corp. | 800,000 | 83,864 | |
| ConocoPhillips Co. | 973,100 | 42,427 | |
| EQT Midstream Partners LP | 193,700 | 15,554 | |
| Kinder Morgan, Inc. | 500,000 | 9,360 | |
| Teekay LNG Partners LP | 1,000,000 | 11,250 | |
| Williams Partners LP | 550,000 | 19,052 | |
| 222,137 | |||
| TOTAL ENERGY | 252,583 | ||
| FINANCIALS - 11.9% | |||
| Banks - 2.9% | |||
| JPMorgan Chase & Co. | 748,900 | 46,537 | |
| M&T Bank Corp. | 155,000 | 18,326 | |
| SunTrust Banks, Inc. | 241,300 | 9,913 | |
| Wells Fargo & Co. | 1,178,367 | 55,772 | |
| 130,548 | |||
| Diversified Financial Services - 4.8% | |||
| Berkshire Hathaway, Inc. Class B (a) | 828,900 | 120,016 | |
| Moody's Corp. | 255,200 | 23,915 | |
| MSCI, Inc. Class A | 450,000 | 34,704 | |
| S&P Global, Inc. | 315,725 | 33,865 | |
| 212,500 | |||
| Insurance - 1.4% | |||
| American International Group, Inc. | 277,500 | 14,677 | |
| FNF Group | 500,000 | 18,750 | |
| Marsh & McLennan Companies, Inc. | 450,000 | 30,807 | |
| 64,234 | |||
| Real Estate Investment Trusts - 2.8% | |||
| American Tower Corp. | 484,100 | 54,999 | |
| Easterly Government Properties, Inc. | 1,211,300 | 23,899 | |
| Public Storage | 175,000 | 44,728 | |
| 123,626 | |||
| TOTAL FINANCIALS | 530,908 | ||
| HEALTH CARE - 14.3% | |||
| Biotechnology - 3.2% | |||
| Actelion Ltd. | 100,000 | 16,840 | |
| Amgen, Inc. | 551,300 | 83,880 | |
| Genmab A/S (a) | 95,000 | 17,323 | |
| Vertex Pharmaceuticals, Inc. (a) | 300,000 | 25,806 | |
| 143,849 | |||
| Health Care Equipment & Supplies - 3.4% | |||
| Boston Scientific Corp. (a) | 2,312,000 | 54,031 | |
| Medtronic PLC | 1,109,700 | 96,289 | |
| 150,320 | |||
| Life Sciences Tools & Services - 1.5% | |||
| Thermo Fisher Scientific, Inc. | 457,700 | 67,630 | |
| Pharmaceuticals - 6.2% | |||
| Allergan PLC (a) | 296,900 | 68,611 | |
| Bristol-Myers Squibb Co. | 930,000 | 68,402 | |
| Johnson & Johnson | 800,000 | 97,040 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 803,900 | 40,380 | |
| 274,433 | |||
| TOTAL HEALTH CARE | 636,232 | ||
| INDUSTRIALS - 9.4% | |||
| Aerospace & Defense - 6.1% | |||
| Honeywell International, Inc. | 520,400 | 60,533 | |
| Huntington Ingalls Industries, Inc. | 360,500 | 60,575 | |
| Northrop Grumman Corp. | 175,000 | 38,899 | |
| Raytheon Co. | 500,000 | 67,975 | |
| United Technologies Corp. | 400,000 | 41,020 | |
| 269,002 | |||
| Building Products - 1.0% | |||
| Lennox International, Inc. | 200,000 | 28,520 | |
| Masco Corp. | 500,000 | 15,470 | |
| 43,990 | |||
| Industrial Conglomerates - 2.2% | |||
| Danaher Corp. | 703,200 | 71,023 | |
| General Electric Co. | 900,000 | 28,332 | |
| 99,355 | |||
| Machinery - 0.1% | |||
| Xylem, Inc. | 110,100 | 4,916 | |
| TOTAL INDUSTRIALS | 417,263 | ||
| INFORMATION TECHNOLOGY - 20.3% | |||
| Electronic Equipment & Components - 2.1% | |||
| Amphenol Corp. Class A | 1,666,776 | 95,556 | |
| Internet Software & Services - 7.6% | |||
| Alphabet, Inc.: | |||
| Class A | 135,600 | 95,399 | |
| Class C (a) | 136,027 | 94,144 | |
| Facebook, Inc. Class A (a) | 1,289,200 | 147,325 | |
| 336,868 | |||
| IT Services - 3.6% | |||
| MasterCard, Inc. Class A | 760,300 | 66,952 | |
| Visa, Inc. Class A | 1,246,400 | 92,445 | |
| 159,397 | |||
| Semiconductors & Semiconductor Equipment - 1.9% | |||
| Lam Research Corp. | 300,000 | 25,218 | |
| NXP Semiconductors NV (a) | 298,217 | 23,362 | |
| Texas Instruments, Inc. | 600,000 | 37,590 | |
| 86,170 | |||
| Software - 3.6% | |||
| Adobe Systems, Inc. (a) | 774,400 | 74,180 | |
| Microsoft Corp. | 900,000 | 46,053 | |
| Salesforce.com, Inc. (a) | 500,000 | 39,705 | |
| 159,938 | |||
| Technology Hardware, Storage & Peripherals - 1.5% | |||
| Apple, Inc. | 723,900 | 69,205 | |
| TOTAL INFORMATION TECHNOLOGY | 907,134 | ||
| MATERIALS - 5.1% | |||
| Chemicals - 3.4% | |||
| E.I. du Pont de Nemours & Co. | 625,000 | 40,500 | |
| Ecolab, Inc. | 402,500 | 47,737 | |
| Monsanto Co. | 328,500 | 33,970 | |
| W.R. Grace & Co. | 400,000 | 29,284 | |
| 151,491 | |||
| Construction Materials - 0.7% | |||
| Vulcan Materials Co. | 262,299 | 31,570 | |
| Containers & Packaging - 0.5% | |||
| Ball Corp. | 300,000 | 21,687 | |
| Metals & Mining - 0.5% | |||
| Franco-Nevada Corp. | 300,000 | 22,812 | |
| TOTAL MATERIALS | 227,560 | ||
| TELECOMMUNICATION SERVICES - 1.8% | |||
| Diversified Telecommunication Services - 1.8% | |||
| AT&T, Inc. | 1,900,000 | 82,099 | |
| UTILITIES - 3.4% | |||
| Electric Utilities - 1.7% | |||
| NextEra Energy, Inc. | 350,000 | 45,640 | |
| Xcel Energy, Inc. | 650,000 | 29,107 | |
| 74,747 | |||
| Multi-Utilities - 1.3% | |||
| Dominion Resources, Inc. | 300,000 | 23,379 | |
| DTE Energy Co. | 350,000 | 34,692 | |
| 58,071 | |||
| Water Utilities - 0.4% | |||
| American Water Works Co., Inc. | 200,000 | 16,902 | |
| TOTAL UTILITIES | 149,720 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $3,324,276) | 4,368,257 | ||
| Principal Amount (000s) | Value (000s) | ||
| U.S. Treasury Obligations - 0.1% | |||
| U.S. Treasury Bills, yield at date of purchase 0.22% to 0.25% 7/14/16 to 7/28/16 (c) | |||
| (Cost $4,509) | 4,510 | 4,510 | |
| Shares | Value (000s) | ||
| Money Market Funds - 2.8% | |||
| Fidelity Cash Central Fund, 0.43% (d) | 116,158,266 | $116,158 | |
| Fidelity Securities Lending Cash Central Fund, 0.46% (d)(e) | 7,647,500 | 7,648 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $123,806) | 123,806 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.9% | |||
| (Cost $3,452,591) | 4,496,573 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.9)% | (38,972) | ||
| NET ASSETS - 100% | $4,457,601 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $1,420,000.
(d) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
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 |
| (Amounts in thousands) | |
| Fidelity Cash Central Fund | $265 |
| Fidelity Securities Lending Cash Central Fund | 247 |
| Total | $512 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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 |
| (Amounts in thousands) | ||||
| Investments in Securities: | ||||
| Equities: | ||||
| Consumer Discretionary | $558,654 | $558,654 | $-- | $-- |
| Consumer Staples | 606,104 | 573,564 | 32,540 | -- |
| Energy | 252,583 | 252,583 | -- | -- |
| Financials | 530,908 | 530,908 | -- | -- |
| Health Care | 636,232 | 602,069 | 34,163 | -- |
| Industrials | 417,263 | 417,263 | -- | -- |
| Information Technology | 907,134 | 907,134 | -- | -- |
| Materials | 227,560 | 227,560 | -- | -- |
| Telecommunication Services | 82,099 | 82,099 | -- | -- |
| Utilities | 149,720 | 149,720 | -- | -- |
| U.S. Government and Government Agency Obligations | 4,510 | -- | 4,510 | -- |
| Money Market Funds | 123,806 | 123,806 | -- | -- |
| Total Investments in Securities: | $4,496,573 | $4,425,360 | $71,213 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended June 30, 2016. 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 (000s) |
| Level 1 to Level 2 | $80,176 |
| Level 2 to Level 1 | $0 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| Amounts in thousands (except per-share amounts) | June 30, 2016 | |
| Assets | ||
| Investment in securities, at value (including securities loaned of $7,262) — See accompanying schedule: Unaffiliated issuers (cost $3,328,785) | $4,372,767 | |
| Fidelity Central Funds (cost $123,806) | 123,806 | |
| Total Investments (cost $3,452,591) | $4,496,573 | |
| Cash | 1 | |
| Foreign currency held at value (cost $224) | 224 | |
| Receivable for investments sold | 48,238 | |
| Receivable for fund shares sold | 1,472 | |
| Dividends receivable | 4,392 | |
| Distributions receivable from Fidelity Central Funds | 29 | |
| Receivable for daily variation margin for derivative instruments | 307 | |
| Other receivables | 197 | |
| Total assets | 4,551,433 | |
| Liabilities | ||
| Payable for investments purchased | $80,382 | |
| Payable for fund shares redeemed | 3,709 | |
| Accrued management fee | 1,262 | |
| Other affiliated payables | 604 | |
| Other payables and accrued expenses | 227 | |
| Collateral on securities loaned, at value | 7,648 | |
| Total liabilities | 93,832 | |
| Net Assets | $4,457,601 | |
| Net Assets consist of: | ||
| Paid in capital | $3,251,258 | |
| Undistributed net investment income | 18,777 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 143,608 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,043,958 | |
| Net Assets | $4,457,601 | |
| Fidelity Fund: | ||
| Net Asset Value, offering price and redemption price per share ($3,761,745 ÷ 89,485 shares) | $42.04 | |
| Class K: | ||
| Net Asset Value, offering price and redemption price per share ($695,856 ÷ 16,551 shares) | $42.04 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Amounts in thousands | Year ended June 30, 2016 | |
| Investment Income | ||
| Dividends | $66,733 | |
| Interest | 6 | |
| Income from Fidelity Central Funds | 512 | |
| Total income | 67,251 | |
| Expenses | ||
| Management fee | $15,955 | |
| Transfer agent fees | 6,358 | |
| Accounting and security lending fees | 1,070 | |
| Custodian fees and expenses | 67 | |
| Independent trustees' fees and expenses | 22 | |
| Registration fees | 81 | |
| Audit | 80 | |
| Legal | 20 | |
| Miscellaneous | 37 | |
| Total expenses before reductions | 23,690 | |
| Expense reductions | (187) | 23,503 |
| Net investment income (loss) | 43,748 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 186,966 | |
| Foreign currency transactions | (225) | |
| Futures contracts | (9,658) | |
| Total net realized gain (loss) | 177,083 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (275,034) | |
| Futures contracts | 2,198 | |
| Total change in net unrealized appreciation (depreciation) | (272,836) | |
| Net gain (loss) | (95,753) | |
| Net increase (decrease) in net assets resulting from operations | $(52,005) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended June 30, 2016 | Year ended June 30, 2015 |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $43,748 | $44,597 |
| Net realized gain (loss) | 177,083 | 715,624 |
| Change in net unrealized appreciation (depreciation) | (272,836) | (184,216) |
| Net increase (decrease) in net assets resulting from operations | (52,005) | 576,005 |
| Distributions to shareholders from net investment income | (36,756) | (39,297) |
| Distributions to shareholders from net realized gain | (224,972) | (600,919) |
| Total distributions | (261,728) | (640,216) |
| Share transactions - net increase (decrease) | (324,381) | (769,920) |
| Total increase (decrease) in net assets | (638,114) | (834,131) |
| Net Assets | ||
| Beginning of period | 5,095,715 | 5,929,846 |
| End of period | $4,457,601 | $5,095,715 |
| Other Information | ||
| Undistributed net investment income end of period | $18,777 | $17,253 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $44.69 | $45.42 | $39.77 | $34.51 | $34.35 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .38 | .34 | .35 | .44 | .37 |
| Net realized and unrealized gain (loss) | (.73) | 3.91 | 8.61 | 5.31 | .02 |
| Total from investment operations | (.35) | 4.25 | 8.96 | 5.75 | .39 |
| Distributions from net investment income | (.31) | (.30) | (.32) | (.49) | (.23) |
| Distributions from net realized gain | (1.99) | (4.68) | (2.98) | – | – |
| Total distributions | (2.30) | (4.98) | (3.31)B | (.49) | (.23) |
| Net asset value, end of period | $42.04 | $44.69 | $45.42 | $39.77 | $34.51 |
| Total ReturnC | (.83)% | 10.52% | 23.70% | 16.85% | 1.21% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .52% | .52% | .53% | .56% | .58% |
| Expenses net of fee waivers, if any | .52% | .52% | .53% | .56% | .58% |
| Expenses net of all reductions | .52% | .52% | .53% | .55% | .58% |
| Net investment income (loss) | .91% | .79% | .82% | 1.18% | 1.13% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $3,762 | $4,143 | $4,811 | $4,451 | $4,364 |
| Portfolio turnover rateF | 67% | 59%G | 93% | 113% | 102% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $3.31 per share is comprised of distributions from net investment income of $.324 and distributions from net realized gain of $2.984 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Fund Class K
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $44.69 | $45.42 | $39.78 | $34.52 | $34.35 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .42 | .39 | .40 | .49 | .42 |
| Net realized and unrealized gain (loss) | (.72) | 3.91 | 8.60 | 5.31 | .02 |
| Total from investment operations | (.30) | 4.30 | 9.00 | 5.80 | .44 |
| Distributions from net investment income | (.36) | (.35) | (.38) | (.54) | (.27) |
| Distributions from net realized gain | (1.99) | (4.68) | (2.98) | – | – |
| Total distributions | (2.35) | (5.03) | (3.36) | (.54) | (.27) |
| Net asset value, end of period | $42.04 | $44.69 | $45.42 | $39.78 | $34.52 |
| Total ReturnB | (.72)% | 10.65% | 23.83% | 17.03% | 1.37% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .41% | .41% | .41% | .42% | .43% |
| Expenses net of fee waivers, if any | .41% | .41% | .41% | .42% | .43% |
| Expenses net of all reductions | .41% | .41% | .41% | .41% | .42% |
| Net investment income (loss) | 1.02% | .90% | .94% | 1.32% | 1.29% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $696 | $952 | $1,119 | $994 | $814 |
| Portfolio turnover rateE | 67% | 59%F | 93% | 113% | 102% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Fidelity Fund and Class K 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of June 30, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, passive foreign investment companies (PFIC), market discount, deferred trustees compensation, partnerships and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $1,068,544 |
| Gross unrealized depreciation | (24,511) |
| Net unrealized appreciation (depreciation) on securities | $1,044,033 |
| Tax Cost | $3,452,540 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $23,043 |
| Undistributed long-term capital gain | $143,559 |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,044,009 |
The tax character of distributions paid was as follows:
| June 30, 2016 | June 30, 2015 | |
| Ordinary Income | $38,221 | $ 128,905 |
| Long-term Capital Gains | 223,507 | 511,311 |
| Total | $261,728 | $ 640,216 |
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end. For the period, the average monthly underlying face amount at value for futures contracts in the aggregate was $60,628. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
During the period the Fund recognized net realized gain (loss) of $(9,658) and a change in net unrealized appreciation (depreciation) of $2,198 related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,085,772 and $3,589,195, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (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 .09% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .34% 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 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 Fidelity Fund. FIIOC receives an asset-based fee of Class K's average net assets. 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 | |
| Fidelity Fund | $5,951 | .15 |
| Class K | 407 | .05 |
| $6,358 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $60 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 $7 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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 $247. During the period, there were no securities loaned to FCM.
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 $149 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 $38.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Fidelity Fund | $28,914 | $31,557 |
| Class K | 7,842 | 7,740 |
| Total | $36,756 | $39,297 |
| From net realized gain | ||
| Fidelity Fund | $183,334 | $495,740 |
| Class K | 41,638 | 105,179 |
| Total | $224,972 | $600,919 |
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 | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Fidelity Fund | ||||
| Shares sold | 3,667 | 4,199 | $152,399 | $183,360 |
| Reinvestment of distributions | 4,583 | 11,899 | 196,417 | 494,064 |
| Shares redeemed | (11,490) | (29,307)(a) | (476,458) | (1,299,539)(a) |
| Net increase (decrease) | (3,240) | (13,209) | $(127,642) | $(622,115) |
| Class K | ||||
| Shares sold | 7,320 | 3,436 | $293,997 | $150,591 |
| Reinvestment of distributions | 1,156 | 2,722 | 49,480 | 112,919 |
| Shares redeemed | (13,234) | (9,474) | (540,216) | (411,315) |
| Net increase (decrease) | (4,758) | (3,316) | $(196,739) | $(147,805) |
(a) Amount includes in-kind redemptions
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-835-5092.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Melissa M. Reilly (1971)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Ms. Reilly also serves as Vice President of other funds. Ms. Reilly is an employee of Fidelity Investments (2004-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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 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 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.
| Annualized Expense Ratio-A | Beginning Account Value January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Fidelity Fund | .52% | |||
| Actual | $1,000.00 | $1,000.70 | $2.59 | |
| Hypothetical-C | $1,000.00 | $1,022.28 | $2.61 | |
| Class K | .42% | |||
| Actual | $1,000.00 | $1,001.20 | $2.09 | |
| Hypothetical-C | $1,000.00 | $1,022.77 | $2.11 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains | |
| Fidelity Fund | 8/15/2016 | 8/12/2016 | $0.220 | $1.383 |
| Class K | 8/15/2016 | 8/12/2016 | $0.242 | $1.383 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended June 30, 2016, $179,049,671 or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Fund and Class K designates 100% of the dividends distributed in August and December 2015 during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Fidelity Fund and Class K designates 100% of the dividends distributed in August and December 2015 during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
FID-K-ANN-0816
1.863253.107
Fidelity® Mega Cap Stock Fund Annual Report June 30, 2016 |
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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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Mega Cap Stock Fund | (2.36)% | 11.49% | 7.06% |
Prior to December 1, 2007, the fund operated under certain different investment policies. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Mega Cap Stock Fund, a class of the fund, on June 30, 2006.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $19,786 | Fidelity® Mega Cap Stock Fund | |
| $20,465 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and the U.K.’s relationship with the European Union – dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Fed’s rate-tightening posture. However, the U.K.’s late-June vote in favor of exiting the EU resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, as the Russell 2000® Index returned -6.73%. The tech-heavy Nasdaq Composite Index returned -1.68%, as major constituent Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted traditionally defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager Matthew Fruhan: For the year, the fund’s share classes (excluding sales charges, if applicable) generated low-single-digit declines, well short of the 3.97% gain of the mega-cap proxy Russell Top 200 Index. The fund also trailed the 3.99% gain of the S&P 500® index. Versus the Russell index, we were hurt most by weak stock selection in the financials sector. We overweighted various financial institutions that struggled this period as interest rates fell. Notable detractors in this sector included Bank of America, Citigroup, Morgan Stanley, JPMorgan Chase and State Street. Our biggest individual relative detractor was not holding benchmark component and online retailer Amazon.com, which performed very well. As good a service as Amazon is, the stock simply did not fit my valuation criteria, and I favored other names that I thought offered better long-term potential. On the positive side, the fund was well-positioned in the pharmaceuticals, biotechnology & life sciences industry within health care. Here, the fund’s top relative contributor was Gilead Sciences, a poor-performing biotechnology company I substantially underweighted. Elsewhere, the fund was helped by its sizable overweighting in industrial conglomerate General Electric. Its shares gained ground as the company continued to refocus on its core industrial businesses.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| JPMorgan Chase & Co.(a) | 3.9 | 4.4 |
| General Electric Co. | 3.6 | 4.0 |
| Microsoft Corp. | 3.4 | 3.8 |
| Apple, Inc. | 3.3 | 3.9 |
| Bank of America Corp. | 2.9 | 3.2 |
| Chevron Corp. | 2.8 | 2.4 |
| Johnson & Johnson | 2.7 | 2.3 |
| Citigroup, Inc. | 2.5 | 2.6 |
| Procter & Gamble Co. | 2.4 | 2.2 |
| Qualcomm, Inc. | 2.1 | 2.0 |
| 29.6 |
(a) Security or a portion of the security is pledged as collateral for call options written.
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Information Technology | 23.1 | 24.8 |
| Financials | 17.4 | 19.3 |
| Health Care | 14.4 | 12.2 |
| Energy | 11.5 | 9.0 |
| Industrials | 11.0 | 11.1 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016* | ||
| Stocks | 99.9% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.1% | |
* Foreign investments - 10.0%
| As of December 31, 2015* | ||
| Stocks | 99.1% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.9% | |
* Foreign investments - 10.0%
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 99.9% | |||
| Shares | Value | ||
| CONSUMER DISCRETIONARY - 9.0% | |||
| Auto Components - 0.1% | |||
| Johnson Controls, Inc. | 72,000 | $3,186,720 | |
| Automobiles - 0.5% | |||
| General Motors Co. | 465,300 | 13,167,990 | |
| Tesla Motors, Inc. (a) | 9,000 | 1,910,520 | |
| 15,078,510 | |||
| Hotels, Restaurants & Leisure - 0.6% | |||
| Las Vegas Sands Corp. | 147,000 | 6,393,030 | |
| Yum! Brands, Inc. | 151,500 | 12,562,380 | |
| 18,955,410 | |||
| Media - 4.7% | |||
| Comcast Corp. Class A | 1,017,000 | 66,298,230 | |
| The Walt Disney Co. | 151,300 | 14,800,166 | |
| Time Warner, Inc. | 784,300 | 57,677,422 | |
| Viacom, Inc. Class B (non-vtg.) | 474,200 | 19,665,074 | |
| 158,440,892 | |||
| Multiline Retail - 1.5% | |||
| Target Corp. | 723,900 | 50,542,698 | |
| Specialty Retail - 1.6% | |||
| Lowe's Companies, Inc. | 662,200 | 52,426,374 | |
| TOTAL CONSUMER DISCRETIONARY | 298,630,604 | ||
| CONSUMER STAPLES - 8.7% | |||
| Beverages - 3.1% | |||
| Diageo PLC | 575,732 | 16,083,455 | |
| PepsiCo, Inc. | 275,705 | 29,208,188 | |
| The Coca-Cola Co. | 1,305,000 | 59,155,650 | |
| 104,447,293 | |||
| Food & Staples Retailing - 1.5% | |||
| CVS Health Corp. | 335,700 | 32,139,918 | |
| Walgreens Boots Alliance, Inc. | 217,097 | 18,077,667 | |
| 50,217,585 | |||
| Household Products - 2.4% | |||
| Procter & Gamble Co. | 923,300 | 78,175,811 | |
| Personal Products - 0.1% | |||
| Estee Lauder Companies, Inc. Class A | 27,400 | 2,493,948 | |
| Tobacco - 1.6% | |||
| British American Tobacco PLC sponsored ADR | 96,200 | 12,455,976 | |
| Philip Morris International, Inc. | 405,630 | 41,260,684 | |
| 53,716,660 | |||
| TOTAL CONSUMER STAPLES | 289,051,297 | ||
| ENERGY - 11.5% | |||
| Energy Equipment & Services - 0.8% | |||
| Baker Hughes, Inc. | 106,500 | 4,806,345 | |
| Schlumberger Ltd. | 291,000 | 23,012,280 | |
| 27,818,625 | |||
| Oil, Gas & Consumable Fuels - 10.7% | |||
| Anadarko Petroleum Corp. | 284,500 | 15,149,625 | |
| Apache Corp. | 616,605 | 34,326,400 | |
| Chevron Corp. | 904,400 | 94,808,252 | |
| ConocoPhillips Co. | 1,217,200 | 53,069,920 | |
| Imperial Oil Ltd. | 801,100 | 25,348,479 | |
| Kinder Morgan, Inc. | 1,962,300 | 36,734,256 | |
| Suncor Energy, Inc. | 2,000,600 | 55,498,668 | |
| The Williams Companies, Inc. | 1,877,500 | 40,610,325 | |
| 355,545,925 | |||
| TOTAL ENERGY | 383,364,550 | ||
| FINANCIALS - 17.4% | |||
| Banks - 12.8% | |||
| Bank of America Corp. | 7,205,900 | 95,622,293 | |
| Citigroup, Inc. | 1,977,270 | 83,816,475 | |
| JPMorgan Chase & Co. | 2,113,700 | 131,345,314 | |
| PNC Financial Services Group, Inc. | 243,800 | 19,842,882 | |
| Standard Chartered PLC (United Kingdom) | 888,526 | 6,741,226 | |
| U.S. Bancorp | 1,337,000 | 53,921,210 | |
| Wells Fargo & Co. | 757,130 | 35,834,963 | |
| 427,124,363 | |||
| Capital Markets - 2.9% | |||
| Charles Schwab Corp. | 686,700 | 17,380,377 | |
| Goldman Sachs Group, Inc. | 77,800 | 11,559,524 | |
| Morgan Stanley | 1,183,900 | 30,757,722 | |
| State Street Corp. | 730,000 | 39,361,600 | |
| 99,059,223 | |||
| Consumer Finance - 0.1% | |||
| American Express Co. | 41,100 | 2,497,236 | |
| Insurance - 1.4% | |||
| American International Group, Inc. | 146,400 | 7,743,096 | |
| Chubb Ltd. | 46,700 | 6,104,157 | |
| Marsh & McLennan Companies, Inc. | 250,080 | 17,120,477 | |
| MetLife, Inc. | 403,395 | 16,067,223 | |
| 47,034,953 | |||
| Real Estate Investment Trusts - 0.2% | |||
| American Tower Corp. | 52,900 | 6,009,969 | |
| TOTAL FINANCIALS | 581,725,744 | ||
| HEALTH CARE - 14.4% | |||
| Biotechnology - 3.4% | |||
| AbbVie, Inc. | 383,867 | 23,765,206 | |
| Amgen, Inc. | 200,690 | 30,534,984 | |
| Biogen, Inc. (a) | 107,100 | 25,898,922 | |
| Celgene Corp. (a) | 142,400 | 14,044,912 | |
| Gilead Sciences, Inc. | 87,100 | 7,265,882 | |
| Intercept Pharmaceuticals, Inc. (a) | 9,000 | 1,284,120 | |
| Regeneron Pharmaceuticals, Inc. (a) | 7,600 | 2,654,148 | |
| Vertex Pharmaceuticals, Inc. (a) | 82,800 | 7,122,456 | |
| 112,570,630 | |||
| Health Care Equipment & Supplies - 2.1% | |||
| Abbott Laboratories | 629,000 | 24,725,990 | |
| Becton, Dickinson & Co. | 15,100 | 2,560,809 | |
| Medtronic PLC | 481,913 | 41,815,591 | |
| 69,102,390 | |||
| Health Care Providers & Services - 2.2% | |||
| Cigna Corp. | 63,500 | 8,127,365 | |
| Express Scripts Holding Co. (a) | 284,962 | 21,600,120 | |
| McKesson Corp. | 224,300 | 41,865,595 | |
| UnitedHealth Group, Inc. | 25,348 | 3,579,138 | |
| 75,172,218 | |||
| Pharmaceuticals - 6.7% | |||
| Allergan PLC (a) | 38,700 | 8,943,183 | |
| Bayer AG | 15,500 | 1,556,741 | |
| Bristol-Myers Squibb Co. | 150,950 | 11,102,373 | |
| GlaxoSmithKline PLC sponsored ADR | 1,394,200 | 60,424,628 | |
| Johnson & Johnson | 730,800 | 88,646,040 | |
| Novartis AG sponsored ADR | 73,200 | 6,039,732 | |
| Sanofi SA | 126,770 | 10,532,398 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 757,200 | 38,034,156 | |
| 225,279,251 | |||
| TOTAL HEALTH CARE | 482,124,489 | ||
| INDUSTRIALS - 11.0% | |||
| Aerospace & Defense - 2.2% | |||
| General Dynamics Corp. | 12,300 | 1,712,652 | |
| The Boeing Co. | 285,800 | 37,116,846 | |
| United Technologies Corp. | 339,400 | 34,805,470 | |
| 73,634,968 | |||
| Air Freight & Logistics - 2.1% | |||
| FedEx Corp. | 123,900 | 18,805,542 | |
| United Parcel Service, Inc. Class B | 478,100 | 51,500,932 | |
| 70,306,474 | |||
| Electrical Equipment - 0.7% | |||
| Eaton Corp. PLC | 127,400 | 7,609,602 | |
| Emerson Electric Co. | 315,900 | 16,477,344 | |
| 24,086,946 | |||
| Industrial Conglomerates - 3.6% | |||
| General Electric Co. | 3,855,500 | 121,371,140 | |
| Machinery - 0.5% | |||
| Caterpillar, Inc. | 24,300 | 1,842,183 | |
| Deere & Co. | 161,300 | 13,071,752 | |
| 14,913,935 | |||
| Road & Rail - 1.9% | |||
| CSX Corp. | 945,400 | 24,656,032 | |
| Norfolk Southern Corp. | 135,200 | 11,509,576 | |
| Union Pacific Corp. | 307,690 | 26,845,953 | |
| 63,011,561 | |||
| TOTAL INDUSTRIALS | 367,325,024 | ||
| INFORMATION TECHNOLOGY - 23.1% | |||
| Communications Equipment - 1.9% | |||
| Cisco Systems, Inc. | 2,194,500 | 62,960,205 | |
| Internet Software & Services - 4.8% | |||
| Alphabet, Inc.: | |||
| Class A | 89,550 | 63,001,112 | |
| Class C (a) | 84,326 | 58,362,025 | |
| Facebook, Inc. Class A (a) | 223,800 | 25,575,864 | |
| Twitter, Inc. (a) | 278,400 | 4,707,744 | |
| Yahoo!, Inc. (a) | 271,739 | 10,206,517 | |
| 161,853,262 | |||
| IT Services - 4.9% | |||
| Cognizant Technology Solutions Corp. Class A (a) | 199,000 | 11,390,760 | |
| First Data Corp. (b) | 768,522 | 8,507,539 | |
| IBM Corp. | 261,700 | 39,720,826 | |
| MasterCard, Inc. Class A | 461,800 | 40,666,108 | |
| PayPal Holdings, Inc. (a) | 253,300 | 9,247,983 | |
| Visa, Inc. Class A | 725,300 | 53,795,501 | |
| 163,328,717 | |||
| Semiconductors & Semiconductor Equipment - 2.1% | |||
| Qualcomm, Inc. | 1,308,300 | 70,085,631 | |
| Software - 4.9% | |||
| Adobe Systems, Inc. (a) | 175,700 | 16,830,303 | |
| Microsoft Corp. | 2,243,400 | 114,794,778 | |
| Oracle Corp. | 734,900 | 30,079,457 | |
| Salesforce.com, Inc. (a) | 36,900 | 2,930,229 | |
| 164,634,767 | |||
| Technology Hardware, Storage & Peripherals - 4.5% | |||
| Apple, Inc. | 1,159,007 | 110,801,069 | |
| EMC Corp. | 1,407,800 | 38,249,926 | |
| 149,050,995 | |||
| TOTAL INFORMATION TECHNOLOGY | 771,913,577 | ||
| MATERIALS - 2.3% | |||
| Chemicals - 2.3% | |||
| E.I. du Pont de Nemours & Co. | 308,300 | 19,977,840 | |
| LyondellBasell Industries NV Class A | 163,700 | 12,182,554 | |
| Monsanto Co. | 410,210 | 42,419,816 | |
| PPG Industries, Inc. | 33,100 | 3,447,365 | |
| 78,027,575 | |||
| TELECOMMUNICATION SERVICES - 1.7% | |||
| Diversified Telecommunication Services - 1.7% | |||
| Verizon Communications, Inc. | 986,225 | 55,070,804 | |
| UTILITIES - 0.8% | |||
| Electric Utilities - 0.8% | |||
| Exelon Corp. | 724,700 | 26,350,092 | |
| TOTAL COMMON STOCKS | |||
| (Cost $2,811,035,911) | 3,333,583,756 | ||
| Money Market Funds - 0.3% | |||
| Fidelity Cash Central Fund, 0.43% (c) | |||
| (Cost $9,984,424) | 9,984,424 | 9,984,424 | |
| TOTAL INVESTMENT PORTFOLIO - 100.2% | |||
| (Cost $2,821,020,335) | 3,343,568,180 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.2)% | (6,497,758) | ||
| NET ASSETS - 100% | $3,337,070,422 |
| Written Options | ||||
| Expiration Date/Exercise Price | Number of Contracts | Premium | Value | |
| Call Options | ||||
| Comcast Corp. Class A | 10/21/16 - $67.50 | 1,500 | $137,997 | $(200,250) |
| JPMorgan Chase & Co. | 9/16/16 - $70.00 | 4,100 | 373,092 | (75,850) |
| Philip Morris International, Inc. | 9/16/16 - $105.00 | 800 | 71,998 | (114,400) |
| The Coca-Cola Co. | 7/15/16 - $48.00 | 2,600 | 41,599 | (3,900) |
| Yum! Brands, Inc. | 7/15/16 - $87.50 | 1,200 | 147,597 | (60,000) |
| TOTAL WRITTEN OPTIONS | $772,283 | $(454,400) |
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 $8,507,539 or 0.3% 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $55,759 |
| Fidelity Securities Lending Cash Central Fund | 136,226 |
| Total | $191,985 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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: | ||||
| Equities: | ||||
| Consumer Discretionary | $298,630,604 | $298,630,604 | $-- | $-- |
| Consumer Staples | 289,051,297 | 272,967,842 | 16,083,455 | -- |
| Energy | 383,364,550 | 383,364,550 | -- | -- |
| Financials | 581,725,744 | 574,984,518 | 6,741,226 | -- |
| Health Care | 482,124,489 | 470,035,350 | 12,089,139 | -- |
| Industrials | 367,325,024 | 367,325,024 | -- | -- |
| Information Technology | 771,913,577 | 771,913,577 | -- | -- |
| Materials | 78,027,575 | 78,027,575 | -- | -- |
| Telecommunication Services | 55,070,804 | 55,070,804 | -- | -- |
| Utilities | 26,350,092 | 26,350,092 | -- | -- |
| Money Market Funds | 9,984,424 | 9,984,424 | -- | -- |
| Total Investments in Securities: | $3,343,568,180 | $3,308,654,360 | $34,913,820 | $-- |
| Derivative Instruments: | ||||
| Liabilities | ||||
| Written Options | $(454,400) | $(454,400) | $-- | $-- |
| Total Liabilities | $(454,400) | $(454,400) | $-- | $-- |
| Total Derivative Instruments: | $(454,400) | $(454,400) | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2016. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value | |
| Asset | Liability | |
| Equity Risk | ||
| Written Options(a) | $0 | $(454,400) |
| Total Equity Risk | 0 | (454,400) |
| Total Value of Derivatives | $0 | $(454,400) |
(a) Gross value is presented in the Statement of Assets and Liabilities in the written options, at value line-item.
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 | 90.0% |
| United Kingdom | 2.9% |
| Canada | 2.5% |
| Ireland | 1.8% |
| Israel | 1.1% |
| Others (Individually Less Than 1%) | 1.7% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| June 30, 2016 | ||
| Assets | ||
| Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $2,811,035,911) | $3,333,583,756 | |
| Fidelity Central Funds (cost $9,984,424) | 9,984,424 | |
| Total Investments (cost $2,821,020,335) | $3,343,568,180 | |
| Receivable for investments sold | 973,090 | |
| Receivable for fund shares sold | 3,897,448 | |
| Dividends receivable | 4,262,727 | |
| Distributions receivable from Fidelity Central Funds | 16,350 | |
| Other receivables | 28,686 | |
| Total assets | 3,352,746,481 | |
| Liabilities | ||
| Payable for investments purchased | $8,151,190 | |
| Payable for fund shares redeemed | 5,088,685 | |
| Accrued management fee | 1,247,778 | |
| Distribution and service plan fees payable | 51,795 | |
| Written options, at value (premium received $772,283) | 454,400 | |
| Other affiliated payables | 630,734 | |
| Other payables and accrued expenses | 51,477 | |
| Total liabilities | 15,676,059 | |
| Net Assets | $3,337,070,422 | |
| Net Assets consist of: | ||
| Paid in capital | $2,813,842,102 | |
| Undistributed net investment income | 25,156,900 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (24,777,361) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 522,848,781 | |
| Net Assets | $3,337,070,422 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($68,800,554 ÷ 4,422,797 shares) | $15.56 | |
| Maximum offering price per share (100/94.25 of $15.56) | $16.51 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($26,145,393 ÷ 1,682,574 shares) | $15.54 | |
| Maximum offering price per share (100/96.50 of $15.54) | $16.10 | |
| Class C: | ||
| Net Asset Value and offering price per share ($31,605,196 ÷ 2,062,759 shares)(a) | $15.32 | |
| Mega Cap Stock: | ||
| Net Asset Value, offering price and redemption price per share ($3,059,690,691 ÷ 195,091,909 shares) | $15.68 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($148,414,212 ÷ 9,453,992 shares) | $15.70 | |
| Class Z: | ||
| Net Asset Value, offering price and redemption price per share ($2,414,376 ÷ 154,276 shares) | $15.65 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended June 30, 2016 | ||
| Investment Income | ||
| Dividends | $81,969,038 | |
| Income from Fidelity Central Funds | 191,985 | |
| Total income | 82,161,023 | |
| Expenses | ||
| Management fee | $15,299,219 | |
| Transfer agent fees | 6,738,746 | |
| Distribution and service plan fees | 673,580 | |
| Accounting and security lending fees | 993,083 | |
| Custodian fees and expenses | 60,583 | |
| Independent trustees' fees and expenses | 15,122 | |
| Registration fees | 237,221 | |
| Audit | 54,591 | |
| Legal | 11,119 | |
| Interest | 3,242 | |
| Miscellaneous | 24,797 | |
| Total expenses before reductions | 24,111,303 | |
| Expense reductions | (93,652) | 24,017,651 |
| Net investment income (loss) | 58,143,372 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 13,856,630 | |
| Foreign currency transactions | 22,650 | |
| Written options | (160,881) | |
| Total net realized gain (loss) | 13,718,399 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (159,461,002) | |
| Assets and liabilities in foreign currencies | (10,246) | |
| Written options | 317,883 | |
| Total change in net unrealized appreciation (depreciation) | (159,153,365) | |
| Net gain (loss) | (145,434,966) | |
| Net increase (decrease) in net assets resulting from operations | $(87,291,594) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $58,143,372 | $52,928,055 |
| Net realized gain (loss) | 13,718,399 | 352,238,859 |
| Change in net unrealized appreciation (depreciation) | (159,153,365) | (177,970,747) |
| Net increase (decrease) in net assets resulting from operations | (87,291,594) | 227,196,167 |
| Distributions to shareholders from net investment income | (52,372,529) | (46,829,535) |
| Distributions to shareholders from net realized gain | (87,099,408) | (111,240,730) |
| Total distributions | (139,471,937) | (158,070,265) |
| Share transactions - net increase (decrease) | (102,232,897) | (48,371,272) |
| Total increase (decrease) in net assets | (328,996,428) | 20,754,630 |
| Net Assets | ||
| Beginning of period | 3,666,066,850 | 3,645,312,220 |
| End of period | $3,337,070,422 | $3,666,066,850 |
| Other Information | ||
| Undistributed net investment income end of period | $25,156,900 | $26,500,350 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class A
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.56 | $16.32 | $13.51 | $11.05 | $10.37 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .23 | .18 | .18 | .17 | .13 |
| Net realized and unrealized gain (loss) | (.65) | .71 | 3.00 | 2.43 | .64 |
| Total from investment operations | (.42) | .89 | 3.18 | 2.60 | .77 |
| Distributions from net investment income | (.18) | (.17) | (.16) | (.14) | (.09) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.58) | (.65) | (.37) | (.14) | (.09) |
| Net asset value, end of period | $15.56 | $16.56 | $16.32 | $13.51 | $11.05 |
| Total ReturnB,C,D | (2.56)% | 5.69% | 23.88% | 23.78% | 7.57% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .95% | 1.05% | .96% | .98% | 1.02% |
| Expenses net of fee waivers, if any | .95% | 1.05% | .96% | .98% | 1.02% |
| Expenses net of all reductions | .95% | 1.05% | .96% | .98% | 1.02% |
| Net investment income (loss) | 1.46% | 1.10% | 1.19% | 1.37% | 1.28% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $68,801 | $117,385 | $77,335 | $20,336 | $8,527 |
| Portfolio turnover rateG,H | 25% | 22%H | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class T
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.57 | $16.31 | $13.51 | $11.05 | $10.38 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .19 | .16 | .14 | .14 | .10 |
| Net realized and unrealized gain (loss) | (.65) | .70 | 3.00 | 2.43 | .64 |
| Total from investment operations | (.46) | .86 | 3.14 | 2.57 | .74 |
| Distributions from net investment income | (.16) | (.13) | (.13) | (.11) | (.07) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.57)B | (.60) | (.34) | (.11) | (.07) |
| Net asset value, end of period | $15.54 | $16.57 | $16.31 | $13.51 | $11.05 |
| Total ReturnC,D | (2.83)% | 5.53% | 23.54% | 23.44% | 7.19% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.21% | 1.21% | 1.22% | 1.26% | 1.32% |
| Expenses net of fee waivers, if any | 1.21% | 1.20% | 1.22% | 1.26% | 1.32% |
| Expenses net of all reductions | 1.20% | 1.20% | 1.22% | 1.26% | 1.32% |
| Net investment income (loss) | 1.21% | .95% | .92% | 1.09% | .98% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $26,145 | $23,231 | $15,728 | $8,377 | $2,293 |
| Portfolio turnover rateG | 25% | 22%H | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.57 per share is comprised of distributions from net investment income of $.164 and distributions from net realized gain of $.404 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class C
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.35 | $16.12 | $13.38 | $10.93 | $10.28 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .11 | .07 | .06 | .07 | .05 |
| Net realized and unrealized gain (loss) | (.64) | .71 | 2.97 | 2.42 | .64 |
| Total from investment operations | (.53) | .78 | 3.03 | 2.49 | .69 |
| Distributions from net investment income | (.09) | (.08) | (.08) | (.04) | (.04) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.50) | (.55) | (.29) | (.04) | (.04) |
| Net asset value, end of period | $15.32 | $16.35 | $16.12 | $13.38 | $10.93 |
| Total ReturnB,C,D | (3.32)% | 5.05% | 22.90% | 22.83% | 6.74% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.70% | 1.70% | 1.71% | 1.75% | 1.79% |
| Expenses net of fee waivers, if any | 1.70% | 1.70% | 1.71% | 1.75% | 1.79% |
| Expenses net of all reductions | 1.69% | 1.70% | 1.71% | 1.75% | 1.79% |
| Net investment income (loss) | .72% | .45% | .43% | .59% | .51% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $31,605 | $34,790 | $16,600 | $7,938 | $2,845 |
| Portfolio turnover rateG,H | 25% | 22%H | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.72 | $16.44 | $13.60 | $11.11 | $10.43 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .27 | .24 | .22 | .20 | .16 |
| Net realized and unrealized gain (loss) | (.66) | .72 | 3.02 | 2.46 | .64 |
| Total from investment operations | (.39) | .96 | 3.24 | 2.66 | .80 |
| Distributions from net investment income | (.25) | (.21) | (.19) | (.17) | (.12) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.65) | (.68) | (.40) | (.17) | (.12) |
| Net asset value, end of period | $15.68 | $16.72 | $16.44 | $13.60 | $11.11 |
| Total ReturnB | (2.36)% | 6.13% | 24.18% | 24.17% | 7.83% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .69% | .67% | .68% | .70% | .76% |
| Expenses net of fee waivers, if any | .69% | .67% | .68% | .70% | .76% |
| Expenses net of all reductions | .68% | .67% | .68% | .70% | .75% |
| Net investment income (loss) | 1.73% | 1.48% | 1.47% | 1.64% | 1.55% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $3,059,691 | $3,300,700 | $2,860,197 | $2,214,592 | $1,287,144 |
| Portfolio turnover rateE,F | 25% | 22%F | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class I
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.73 | $16.39 | $13.55 | $11.08 | $10.40 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .27 | .24 | .22 | .20 | .16 |
| Net realized and unrealized gain (loss) | (.65) | .72 | 3.02 | 2.44 | .63 |
| Total from investment operations | (.38) | .96 | 3.24 | 2.64 | .79 |
| Distributions from net investment income | (.24) | (.15) | (.18) | (.17) | (.11) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.65) | (.62) | (.40) | (.17) | (.11) |
| Net asset value, end of period | $15.70 | $16.73 | $16.39 | $13.55 | $11.08 |
| Total ReturnB,C | (2.31)% | 6.11% | 24.23% | 24.06% | 7.77% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .68% | .69% | .71% | .74% | .78% |
| Expenses net of fee waivers, if any | .68% | .68% | .71% | .74% | .78% |
| Expenses net of all reductions | .68% | .68% | .71% | .74% | .77% |
| Net investment income (loss) | 1.73% | 1.47% | 1.43% | 1.61% | 1.53% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $148,414 | $186,637 | $674,416 | $312,814 | $175,833 |
| Portfolio turnover rateF,G | 25% | 22%G | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class Z
| Years ended June 30, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | |||
| Net asset value, beginning of period | $16.69 | $16.40 | $14.31 |
| Income from Investment Operations | |||
| Net investment income (loss)B | .29 | .27 | .21 |
| Net realized and unrealized gain (loss) | (.66) | .72 | 2.20 |
| Total from investment operations | (.37) | .99 | 2.41 |
| Distributions from net investment income | (.27) | (.23) | (.10) |
| Distributions from net realized gain | (.40) | (.47) | (.21) |
| Total distributions | (.67) | (.70) | (.32) |
| Net asset value, end of period | $15.65 | $16.69 | $16.40 |
| Total ReturnC,D | (2.21)% | 6.33% | 17.06% |
| Ratios to Average Net AssetsE,F | |||
| Expenses before reductions | .54% | .54% | .54%G |
| Expenses net of fee waivers, if any | .54% | .54% | .54%G |
| Expenses net of all reductions | .53% | .54% | .54%G |
| Net investment income (loss) | 1.88% | 1.61% | 1.59%G |
| Supplemental Data | |||
| Net assets, end of period (000 omitted) | $2,414 | $2,449 | $117 |
| Portfolio turnover rateH,I | 25% | 22%I | 28%G |
A For the period August 13, 2013 (commencement of sale of shares) to June 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
1. Organization.
Fidelity Mega Cap Stock Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Mega Cap Stock, Class I (formerly Institutional Class) and Class Z 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.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period July 1, 2015 through June 24, 2016.
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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price 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 June 30, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, Partnerships, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $681,059,422 |
| Gross unrealized depreciation | (179,111,333) |
| Net unrealized appreciation (depreciation) on securities | $501,948,089 |
| Tax Cost | $2,841,620,091 |
The Fund intends to elect to defer to its next fiscal year $4,177,604 of capital losses recognized during the period November 1, 2015 to June 30, 2016.
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $25,157,344 |
| Net unrealized appreciation (depreciation) on securities and other investments | $502,248,580 |
The tax character of distributions paid was as follows:
| Undistributed tax-exempt income | $– |
| Undistributed ordinary income | $25,157,344 |
| Net unrealized appreciation (depreciation) on securities and other investments | $502,248,580 |
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. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including options. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded options may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Options. Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price between or on certain dates. Options obligate the seller (writer) to buy (put) or sell (call) an underlying instrument at the exercise or strike price or cash settle an underlying derivative instrument if the holder exercises the option on or before the expiration date. The Fund uses exchange-traded options to manage its exposure to the market.
Upon entering into an options contract, a fund will pay or receive a premium. Premiums paid on purchased options are reflected as cost of investments and premiums received on written options are reflected as a liability on the Statement of Assets and Liabilities. Certain options may be purchased or written with premiums to be paid or received on a future date. Options are valued daily and any unrealized appreciation (depreciation) is reflected on the Statement of Assets and Liabilities. When an option is exercised, the cost or proceeds of the underlying instrument purchased or sold is adjusted by the amount of the premium. When an option is closed the Fund will realize a gain or loss depending on whether the proceeds or amount paid for the closing sale transaction is greater or less than the premium received or paid. When an option expires, gains and losses are realized to the extent of premiums received and paid, respectively. The net realized and unrealized gains (losses) on purchased options are included on the Statement of Operations in net realized gain (loss) and change in net unrealized appreciation (depreciation) on investment securities. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on written options are reflected separately on the Statement of Operations.
Any open options at period end are presented in the Schedule of Investments under the captions "Purchased Options," "Purchased Swaptions," "Written Options" and "Written Swaptions," as applicable, and are representative of volume of activity during the period.
The following is a summary of the Fund's written options activity:
| [[Commodity Risk | Commodity risk is the risk that the value of a commodity will fluctuate as a result of changes in market prices.]] |
| [[Credit Risk | Credit risk relates to the ability of the issuer of a financial instrument to make further principal or interest payments on an obligation or commitment that it has to the Fund.]] |
| [[Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment.]] |
| [[Foreign Exchange Risk | Foreign exchange rate risk relates to fluctuations in the value of an asset or liability due to changes in currency exchange rates.]] |
| [[Interest Rate Risk | Interest rate risk relates to the fluctuations in the value of interest-bearing securities due to changes in the prevailing levels of market interest rates.]] |
Writing puts and buying calls tend to increase exposure to the underlying instrument while buying puts and writing calls tend to decrease exposure to the underlying instrument. For purchased options, risk of loss is limited to the premium paid, and for written options, risk of loss is the change in value in excess of the premium received.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $841,341,978 and $1,021,885,711, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (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 .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .45% 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% | $219,724 | $– |
| Class T | .25% | .25% | 118,040 | – |
| Class B | .75% | .25% | 6,519 | 4,891 |
| Class C | .75% | .25% | 329,297 | 93,979 |
| $673,580 | $98,870 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $37,970 |
| Class T | 5,720 |
| Class B(a) | 273 |
| Class C(a) | 12,296 |
| $56,259 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund, except for Class Z. FIIOC receives an asset-based fee of Class Z's average net assets. 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 | $188,140 | .21 |
| Class T | 51,376 | .22 |
| Class B | 1,800 | .27 |
| Class C | 68,303 | .21 |
| Mega Cap Stock | 6,112,204 | .20 |
| Class I | 315,808 | .19 |
| Class Z | 1,115 | .05 |
| $6,738,746 |
(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.
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 $16,503 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $20,553,231 | .44% | $3,242 |
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 $5,334 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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 $136,226. During the period, there were no securities loaned to FCM.
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 $66,297 for the period. In addition, 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. During the period, these credits reduced the Fund's custody expenses by $31.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $27,324.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Class A | $1,080,757 | $950,795 |
| Class T | 237,487 | 142,768 |
| Class B | 2,701 | 987 |
| Class C | 200,810 | 106,396 |
| Mega Cap Stock | 48,178,641 | 44,068,113 |
| Class I | 2,632,093 | 1,558,917 |
| Class Z | 40,040 | 1,559 |
| Total | $52,372,529 | $46,829,535 |
| From net realized gain | ||
| Class A | $2,557,147 | $2,510,571 |
| Class T | 579,808 | 494,206 |
| Class B | 19,784 | 24,560 |
| Class C | 882,477 | 584,855 |
| Mega Cap Stock | 78,620,158 | 102,921,747 |
| Class I | 4,380,245 | 4,701,472 |
| Class Z | 59,789 | 3,319 |
| Total | $87,099,408 | $111,240,730 |
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 | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Class A | ||||
| Shares sold | 2,249,513 | 5,262,936 | $35,033,810 | $85,912,467 |
| Reinvestment of distributions | 222,669 | 215,202 | 3,545,701 | 3,382,641 |
| Shares redeemed | (5,136,376) | (3,131,094) | (81,329,239) | (51,196,855) |
| Net increase (decrease) | (2,664,194) | 2,347,044 | $(42,749,728) | $38,098,253 |
| Class T | ||||
| Shares sold | 686,666 | 751,262 | $10,511,335 | $12,268,310 |
| Reinvestment of distributions | 51,253 | 40,216 | 811,536 | 633,071 |
| Shares redeemed | (457,036) | (354,371) | (6,981,965) | (5,807,319) |
| Net increase (decrease) | 280,883 | 437,107 | $4,340,906 | $7,094,062 |
| Class B | ||||
| Shares sold | 5,282 | 9,844 | $81,885 | $158,413 |
| Reinvestment of distributions | 1,413 | 1,621 | 22,443 | 25,462 |
| Shares redeemed | (59,664) | (15,153) | (913,434) | (248,719) |
| Net increase (decrease) | (52,969) | (3,688) | $(809,106) | $(64,844) |
| Class C | ||||
| Shares sold | 670,666 | 1,409,999 | $10,277,856 | $22,764,590 |
| Reinvestment of distributions | 68,302 | 43,387 | 1,069,779 | 676,285 |
| Shares redeemed | (803,589) | (355,732) | (12,024,954) | (5,782,952) |
| Net increase (decrease) | (64,621) | 1,097,654 | $(677,319) | $17,657,923 |
| Mega Cap Stock | ||||
| Shares sold | 73,675,851 | 107,166,467 | $1,142,159,263 | $1,752,258,464 |
| Reinvestment of distributions | 7,313,288 | 8,630,508 | 116,494,236 | 136,563,203 |
| Shares redeemed | (83,289,947) | (92,388,644)(a) | (1,294,330,166) | (1,518,515,214)(a) |
| Net increase (decrease) | (2,300,808) | 23,408,331 | $(35,676,667) | $370,306,453 |
| Class I | ||||
| Shares sold | 2,012,535 | 22,065,940(b) | $31,112,150 | $358,328,832(b) |
| Reinvestment of distributions | 417,290 | 376,861 | 6,659,834 | 5,974,450 |
| Shares redeemed | (4,128,858) | (52,444,350) | (64,549,339) | (848,059,899) |
| Net increase (decrease) | (1,699,033) | (30,001,549) | $(26,777,355) | $(483,756,617) |
| Class Z | ||||
| Shares sold | 14,166 | 143,767 | $216,431 | $2,363,066 |
| Reinvestment of distributions | 6,283 | 309 | 99,829 | 4,878 |
| Shares redeemed | (12,944) | (4,443) | (199,888) | (74,446) |
| Net increase (decrease) | 7,505 | 139,633 | $116,372 | $2,293,498 |
(a) Amount includes in-kind redemptions.
(b) Amount includes in-kind exchanges.
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Mega Cap Stock Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Mega Cap Stock Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Mega Cap Stock Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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 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 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 January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Class A | .93% | |||
| Actual | $1,000.00 | $1,003.20 | $4.63 | |
| Hypothetical-C | $1,000.00 | $1,020.24 | $4.67 | |
| Class T | 1.21% | |||
| Actual | $1,000.00 | $1,001.30 | $6.02 | |
| Hypothetical-C | $1,000.00 | $1,018.85 | $6.07 | |
| Class C | 1.70% | |||
| Actual | $1,000.00 | $998.70 | $8.45 | |
| Hypothetical-C | $1,000.00 | $1,016.41 | $8.52 | |
| Mega Cap Stock | .69% | |||
| Actual | $1,000.00 | $1,003.80 | $3.44 | |
| Hypothetical-C | $1,000.00 | $1,021.43 | $3.47 | |
| Class I | .68% | |||
| Actual | $1,000.00 | $1,004.50 | $3.39 | |
| Hypothetical-C | $1,000.00 | $1,021.48 | $3.42 | |
| Class Z | .54% | |||
| Actual | $1,000.00 | $1,005.10 | $2.69 | |
| Hypothetical-C | $1,000.00 | $1,022.18 | $2.72 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The fund hereby designates as a capital gain dividend with respect to the taxable year ended June 30, 2016, $30,623,334, or, if subsequently determined to be different, the net capital gain of such year.
Class A, Class T, Class B, Class C, Mega Cap Stock, Class I and Class Z designate 100% of the dividends distributed in August and December during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A, Class T, Class B, Class C, Mega Cap Stock, Class I and Class Z designate 100% of the dividends distributed in August and December during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
GII-ANN-0816
1.723705.117
Fidelity Advisor® Mega Cap Stock Fund - Class A, Class T, Class C, Class I and Class Z (Class I formerly Institutional Class) Annual Report June 30, 2016 Class A, Class T, Class C, Class I and Class Z are classes of Fidelity® Mega Cap Stock Fund |
|
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 1-877-208-0098 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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (8.16)% | 9.87% | 6.17% |
| Class T (incl. 3.50% sales charge) | (6.23)% | 10.10% | 6.19% |
| Class C (incl. contingent deferred sales charge) | (4.26)% | 10.35% | 6.14% |
| Class I | (2.31)% | 11.48% | 7.06% |
| Class Z | (2.21)% | 11.58% | 7.10% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on February 5, 2008. Returns prior to February 5, 2008, are those of Fidelity® Mega Cap Stock Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to February 5, 2008, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on February 5, 2008. Returns prior to February 5, 2008, are those of Fidelity® Mega Cap Stock Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to February 5, 2008, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on February 5, 2008. Returns prior to February 5, 2008, are those of Fidelity® Mega Cap Stock Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to February 5, 2008, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on February 5,2008. Returns prior to February 5,2008 are those of Fidelity® Mega Cap Stock Fund, the original class of the fund.
The initial offering of Class Z shares took place on August 13, 2013. Returns between February 5, 2008 and August 13, 2013, are those of Class I. Returns prior to February 5, 2008, are those of Fidelity® Mega Cap Stock Fund, the original class of the fund.
Prior to December 1, 2007, the fund operated under certain different investment policies. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Mega Cap Stock Fund - Class A on June 30, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
See previous page for additional information regarding the performance of Class A.
| Period Ending Values | ||
| $18,201 | Fidelity Advisor® Mega Cap Stock Fund - Class A | |
| $20,465 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and the U.K.’s relationship with the European Union – dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Fed’s rate-tightening posture. However, the U.K.’s late-June vote in favor of exiting the EU resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, as the Russell 2000® Index returned -6.73%. The tech-heavy Nasdaq Composite Index returned -1.68%, as major constituent Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted traditionally defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager Matthew Fruhan: For the year, the fund’s share classes (excluding sales charges, if applicable) generated low-single-digit declines, well short of the 3.97% gain of the mega-cap proxy Russell Top 200 Index. The fund also trailed the 3.99% gain of the S&P 500® index. Versus the Russell index, we were hurt most by weak stock selection in the financials sector. We overweighted various financial institutions that struggled this period as interest rates fell. Notable detractors in this sector included Bank of America, Citigroup, Morgan Stanley, JPMorgan Chase and State Street. Our biggest individual relative detractor was not holding benchmark component and online retailer Amazon.com, which performed very well. As good a service as Amazon is, the stock simply did not fit my valuation criteria, and I favored other names that I thought offered better long-term potential. On the positive side, the fund was well-positioned in the pharmaceuticals, biotechnology & life sciences industry within health care. Here, the fund’s top relative contributor was Gilead Sciences, a poor-performing biotechnology company I substantially underweighted. Elsewhere, the fund was helped by its sizable overweighting in industrial conglomerate General Electric. Its shares gained ground as the company continued to refocus on its core industrial businesses.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| JPMorgan Chase & Co.(a) | 3.9 | 4.4 |
| General Electric Co. | 3.6 | 4.0 |
| Microsoft Corp. | 3.4 | 3.8 |
| Apple, Inc. | 3.3 | 3.9 |
| Bank of America Corp. | 2.9 | 3.2 |
| Chevron Corp. | 2.8 | 2.4 |
| Johnson & Johnson | 2.7 | 2.3 |
| Citigroup, Inc. | 2.5 | 2.6 |
| Procter & Gamble Co. | 2.4 | 2.2 |
| Qualcomm, Inc. | 2.1 | 2.0 |
| 29.6 |
(a) Security or a portion of the security is pledged as collateral for call options written.
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Information Technology | 23.1 | 24.8 |
| Financials | 17.4 | 19.3 |
| Health Care | 14.4 | 12.2 |
| Energy | 11.5 | 9.0 |
| Industrials | 11.0 | 11.1 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016* | ||
| Stocks | 99.9% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.1% | |
* Foreign investments - 10.0%
| As of December 31, 2015 * | ||
| Stocks | 99.1% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.9% | |
* Foreign investments - 10.0%
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 99.9% | |||
| Shares | Value | ||
| CONSUMER DISCRETIONARY - 9.0% | |||
| Auto Components - 0.1% | |||
| Johnson Controls, Inc. | 72,000 | $3,186,720 | |
| Automobiles - 0.5% | |||
| General Motors Co. | 465,300 | 13,167,990 | |
| Tesla Motors, Inc. (a) | 9,000 | 1,910,520 | |
| 15,078,510 | |||
| Hotels, Restaurants & Leisure - 0.6% | |||
| Las Vegas Sands Corp. | 147,000 | 6,393,030 | |
| Yum! Brands, Inc. | 151,500 | 12,562,380 | |
| 18,955,410 | |||
| Media - 4.7% | |||
| Comcast Corp. Class A | 1,017,000 | 66,298,230 | |
| The Walt Disney Co. | 151,300 | 14,800,166 | |
| Time Warner, Inc. | 784,300 | 57,677,422 | |
| Viacom, Inc. Class B (non-vtg.) | 474,200 | 19,665,074 | |
| 158,440,892 | |||
| Multiline Retail - 1.5% | |||
| Target Corp. | 723,900 | 50,542,698 | |
| Specialty Retail - 1.6% | |||
| Lowe's Companies, Inc. | 662,200 | 52,426,374 | |
| TOTAL CONSUMER DISCRETIONARY | 298,630,604 | ||
| CONSUMER STAPLES - 8.7% | |||
| Beverages - 3.1% | |||
| Diageo PLC | 575,732 | 16,083,455 | |
| PepsiCo, Inc. | 275,705 | 29,208,188 | |
| The Coca-Cola Co. | 1,305,000 | 59,155,650 | |
| 104,447,293 | |||
| Food & Staples Retailing - 1.5% | |||
| CVS Health Corp. | 335,700 | 32,139,918 | |
| Walgreens Boots Alliance, Inc. | 217,097 | 18,077,667 | |
| 50,217,585 | |||
| Household Products - 2.4% | |||
| Procter & Gamble Co. | 923,300 | 78,175,811 | |
| Personal Products - 0.1% | |||
| Estee Lauder Companies, Inc. Class A | 27,400 | 2,493,948 | |
| Tobacco - 1.6% | |||
| British American Tobacco PLC sponsored ADR | 96,200 | 12,455,976 | |
| Philip Morris International, Inc. | 405,630 | 41,260,684 | |
| 53,716,660 | |||
| TOTAL CONSUMER STAPLES | 289,051,297 | ||
| ENERGY - 11.5% | |||
| Energy Equipment & Services - 0.8% | |||
| Baker Hughes, Inc. | 106,500 | 4,806,345 | |
| Schlumberger Ltd. | 291,000 | 23,012,280 | |
| 27,818,625 | |||
| Oil, Gas & Consumable Fuels - 10.7% | |||
| Anadarko Petroleum Corp. | 284,500 | 15,149,625 | |
| Apache Corp. | 616,605 | 34,326,400 | |
| Chevron Corp. | 904,400 | 94,808,252 | |
| ConocoPhillips Co. | 1,217,200 | 53,069,920 | |
| Imperial Oil Ltd. | 801,100 | 25,348,479 | |
| Kinder Morgan, Inc. | 1,962,300 | 36,734,256 | |
| Suncor Energy, Inc. | 2,000,600 | 55,498,668 | |
| The Williams Companies, Inc. | 1,877,500 | 40,610,325 | |
| 355,545,925 | |||
| TOTAL ENERGY | 383,364,550 | ||
| FINANCIALS - 17.4% | |||
| Banks - 12.8% | |||
| Bank of America Corp. | 7,205,900 | 95,622,293 | |
| Citigroup, Inc. | 1,977,270 | 83,816,475 | |
| JPMorgan Chase & Co. | 2,113,700 | 131,345,314 | |
| PNC Financial Services Group, Inc. | 243,800 | 19,842,882 | |
| Standard Chartered PLC (United Kingdom) | 888,526 | 6,741,226 | |
| U.S. Bancorp | 1,337,000 | 53,921,210 | |
| Wells Fargo & Co. | 757,130 | 35,834,963 | |
| 427,124,363 | |||
| Capital Markets - 2.9% | |||
| Charles Schwab Corp. | 686,700 | 17,380,377 | |
| Goldman Sachs Group, Inc. | 77,800 | 11,559,524 | |
| Morgan Stanley | 1,183,900 | 30,757,722 | |
| State Street Corp. | 730,000 | 39,361,600 | |
| 99,059,223 | |||
| Consumer Finance - 0.1% | |||
| American Express Co. | 41,100 | 2,497,236 | |
| Insurance - 1.4% | |||
| American International Group, Inc. | 146,400 | 7,743,096 | |
| Chubb Ltd. | 46,700 | 6,104,157 | |
| Marsh & McLennan Companies, Inc. | 250,080 | 17,120,477 | |
| MetLife, Inc. | 403,395 | 16,067,223 | |
| 47,034,953 | |||
| Real Estate Investment Trusts - 0.2% | |||
| American Tower Corp. | 52,900 | 6,009,969 | |
| TOTAL FINANCIALS | 581,725,744 | ||
| HEALTH CARE - 14.4% | |||
| Biotechnology - 3.4% | |||
| AbbVie, Inc. | 383,867 | 23,765,206 | |
| Amgen, Inc. | 200,690 | 30,534,984 | |
| Biogen, Inc. (a) | 107,100 | 25,898,922 | |
| Celgene Corp. (a) | 142,400 | 14,044,912 | |
| Gilead Sciences, Inc. | 87,100 | 7,265,882 | |
| Intercept Pharmaceuticals, Inc. (a) | 9,000 | 1,284,120 | |
| Regeneron Pharmaceuticals, Inc. (a) | 7,600 | 2,654,148 | |
| Vertex Pharmaceuticals, Inc. (a) | 82,800 | 7,122,456 | |
| 112,570,630 | |||
| Health Care Equipment & Supplies - 2.1% | |||
| Abbott Laboratories | 629,000 | 24,725,990 | |
| Becton, Dickinson & Co. | 15,100 | 2,560,809 | |
| Medtronic PLC | 481,913 | 41,815,591 | |
| 69,102,390 | |||
| Health Care Providers & Services - 2.2% | |||
| Cigna Corp. | 63,500 | 8,127,365 | |
| Express Scripts Holding Co. (a) | 284,962 | 21,600,120 | |
| McKesson Corp. | 224,300 | 41,865,595 | |
| UnitedHealth Group, Inc. | 25,348 | 3,579,138 | |
| 75,172,218 | |||
| Pharmaceuticals - 6.7% | |||
| Allergan PLC (a) | 38,700 | 8,943,183 | |
| Bayer AG | 15,500 | 1,556,741 | |
| Bristol-Myers Squibb Co. | 150,950 | 11,102,373 | |
| GlaxoSmithKline PLC sponsored ADR | 1,394,200 | 60,424,628 | |
| Johnson & Johnson | 730,800 | 88,646,040 | |
| Novartis AG sponsored ADR | 73,200 | 6,039,732 | |
| Sanofi SA | 126,770 | 10,532,398 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 757,200 | 38,034,156 | |
| 225,279,251 | |||
| TOTAL HEALTH CARE | 482,124,489 | ||
| INDUSTRIALS - 11.0% | |||
| Aerospace & Defense - 2.2% | |||
| General Dynamics Corp. | 12,300 | 1,712,652 | |
| The Boeing Co. | 285,800 | 37,116,846 | |
| United Technologies Corp. | 339,400 | 34,805,470 | |
| 73,634,968 | |||
| Air Freight & Logistics - 2.1% | |||
| FedEx Corp. | 123,900 | 18,805,542 | |
| United Parcel Service, Inc. Class B | 478,100 | 51,500,932 | |
| 70,306,474 | |||
| Electrical Equipment - 0.7% | |||
| Eaton Corp. PLC | 127,400 | 7,609,602 | |
| Emerson Electric Co. | 315,900 | 16,477,344 | |
| 24,086,946 | |||
| Industrial Conglomerates - 3.6% | |||
| General Electric Co. | 3,855,500 | 121,371,140 | |
| Machinery - 0.5% | |||
| Caterpillar, Inc. | 24,300 | 1,842,183 | |
| Deere & Co. | 161,300 | 13,071,752 | |
| 14,913,935 | |||
| Road & Rail - 1.9% | |||
| CSX Corp. | 945,400 | 24,656,032 | |
| Norfolk Southern Corp. | 135,200 | 11,509,576 | |
| Union Pacific Corp. | 307,690 | 26,845,953 | |
| 63,011,561 | |||
| TOTAL INDUSTRIALS | 367,325,024 | ||
| INFORMATION TECHNOLOGY - 23.1% | |||
| Communications Equipment - 1.9% | |||
| Cisco Systems, Inc. | 2,194,500 | 62,960,205 | |
| Internet Software & Services - 4.8% | |||
| Alphabet, Inc.: | |||
| Class A | 89,550 | 63,001,112 | |
| Class C (a) | 84,326 | 58,362,025 | |
| Facebook, Inc. Class A (a) | 223,800 | 25,575,864 | |
| Twitter, Inc. (a) | 278,400 | 4,707,744 | |
| Yahoo!, Inc. (a) | 271,739 | 10,206,517 | |
| 161,853,262 | |||
| IT Services - 4.9% | |||
| Cognizant Technology Solutions Corp. Class A (a) | 199,000 | 11,390,760 | |
| First Data Corp. (b) | 768,522 | 8,507,539 | |
| IBM Corp. | 261,700 | 39,720,826 | |
| MasterCard, Inc. Class A | 461,800 | 40,666,108 | |
| PayPal Holdings, Inc. (a) | 253,300 | 9,247,983 | |
| Visa, Inc. Class A | 725,300 | 53,795,501 | |
| 163,328,717 | |||
| Semiconductors & Semiconductor Equipment - 2.1% | |||
| Qualcomm, Inc. | 1,308,300 | 70,085,631 | |
| Software - 4.9% | |||
| Adobe Systems, Inc. (a) | 175,700 | 16,830,303 | |
| Microsoft Corp. | 2,243,400 | 114,794,778 | |
| Oracle Corp. | 734,900 | 30,079,457 | |
| Salesforce.com, Inc. (a) | 36,900 | 2,930,229 | |
| 164,634,767 | |||
| Technology Hardware, Storage & Peripherals - 4.5% | |||
| Apple, Inc. | 1,159,007 | 110,801,069 | |
| EMC Corp. | 1,407,800 | 38,249,926 | |
| 149,050,995 | |||
| TOTAL INFORMATION TECHNOLOGY | 771,913,577 | ||
| MATERIALS - 2.3% | |||
| Chemicals - 2.3% | |||
| E.I. du Pont de Nemours & Co. | 308,300 | 19,977,840 | |
| LyondellBasell Industries NV Class A | 163,700 | 12,182,554 | |
| Monsanto Co. | 410,210 | 42,419,816 | |
| PPG Industries, Inc. | 33,100 | 3,447,365 | |
| 78,027,575 | |||
| TELECOMMUNICATION SERVICES - 1.7% | |||
| Diversified Telecommunication Services - 1.7% | |||
| Verizon Communications, Inc. | 986,225 | 55,070,804 | |
| UTILITIES - 0.8% | |||
| Electric Utilities - 0.8% | |||
| Exelon Corp. | 724,700 | 26,350,092 | |
| TOTAL COMMON STOCKS | |||
| (Cost $2,811,035,911) | 3,333,583,756 | ||
| Money Market Funds - 0.3% | |||
| Fidelity Cash Central Fund, 0.43% (c) | |||
| (Cost $9,984,424) | 9,984,424 | 9,984,424 | |
| TOTAL INVESTMENT PORTFOLIO - 100.2% | |||
| (Cost $2,821,020,335) | 3,343,568,180 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.2)% | (6,497,758) | ||
| NET ASSETS - 100% | $3,337,070,422 |
| Written Options | ||||
| Expiration Date/Exercise Price | Number of Contracts | Premium | Value | |
| Call Options | ||||
| Comcast Corp. Class A | 10/21/16 - $67.50 | 1,500 | $137,997 | $(200,250) |
| JPMorgan Chase & Co. | 9/16/16 - $70.00 | 4,100 | 373,092 | (75,850) |
| Philip Morris International, Inc. | 9/16/16 - $105.00 | 800 | 71,998 | (114,400) |
| The Coca-Cola Co. | 7/15/16 - $48.00 | 2,600 | 41,599 | (3,900) |
| Yum! Brands, Inc. | 7/15/16 - $87.50 | 1,200 | 147,597 | (60,000) |
| TOTAL WRITTEN OPTIONS | $772,283 | $(454,400) |
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 $8,507,539 or 0.3% 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, which are not covered by the Fund’s Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $55,759 |
| Fidelity Securities Lending Cash Central Fund | 136,226 |
| Total | $191,985 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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: | ||||
| Equities: | ||||
| Consumer Discretionary | $298,630,604 | $298,630,604 | $-- | $-- |
| Consumer Staples | 289,051,297 | 272,967,842 | 16,083,455 | -- |
| Energy | 383,364,550 | 383,364,550 | -- | -- |
| Financials | 581,725,744 | 574,984,518 | 6,741,226 | -- |
| Health Care | 482,124,489 | 470,035,350 | 12,089,139 | -- |
| Industrials | 367,325,024 | 367,325,024 | -- | -- |
| Information Technology | 771,913,577 | 771,913,577 | -- | -- |
| Materials | 78,027,575 | 78,027,575 | -- | -- |
| Telecommunication Services | 55,070,804 | 55,070,804 | -- | -- |
| Utilities | 26,350,092 | 26,350,092 | -- | -- |
| Money Market Funds | 9,984,424 | 9,984,424 | -- | -- |
| Total Investments in Securities: | $3,343,568,180 | $3,308,654,360 | $34,913,820 | $-- |
| Derivative Instruments: | ||||
| Liabilities | ||||
| Written Options | $(454,400) | $(454,400) | $-- | $-- |
| Total Liabilities | $(454,400) | $(454,400) | $-- | $-- |
| Total Derivative Instruments: | $(454,400) | $(454,400) | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2016. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value | |
| Asset | Liability | |
| Equity Risk | ||
| Written Options(a) | $0 | $(454,400) |
| Total Equity Risk | 0 | (454,400) |
| Total Value of Derivatives | $0 | $(454,400) |
(a) Gross value is presented in the Statement of Assets and Liabilities in the written options, at value line-item.
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 | 90.0% |
| United Kingdom | 2.9% |
| Canada | 2.5% |
| Ireland | 1.8% |
| Israel | 1.1% |
| Others (Individually Less Than 1%) | 1.7% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| June 30, 2016 | ||
| Assets | ||
| Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $2,811,035,911) | $3,333,583,756 | |
| Fidelity Central Funds (cost $9,984,424) | 9,984,424 | |
| Total Investments (cost $2,821,020,335) | $3,343,568,180 | |
| Receivable for investments sold | 973,090 | |
| Receivable for fund shares sold | 3,897,448 | |
| Dividends receivable | 4,262,727 | |
| Distributions receivable from Fidelity Central Funds | 16,350 | |
| Other receivables | 28,686 | |
| Total assets | 3,352,746,481 | |
| Liabilities | ||
| Payable for investments purchased | $8,151,190 | |
| Payable for fund shares redeemed | 5,088,685 | |
| Accrued management fee | 1,247,778 | |
| Distribution and service plan fees payable | 51,795 | |
| Written options, at value (premium received $772,283) | 454,400 | |
| Other affiliated payables | 630,734 | |
| Other payables and accrued expenses | 51,477 | |
| Total liabilities | 15,676,059 | |
| Net Assets | $3,337,070,422 | |
| Net Assets consist of: | ||
| Paid in capital | $2,813,842,102 | |
| Undistributed net investment income | 25,156,900 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (24,777,361) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 522,848,781 | |
| Net Assets | $3,337,070,422 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($68,800,554 ÷ 4,422,797 shares) | $15.56 | |
| Maximum offering price per share (100/94.25 of $15.56) | $16.51 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($26,145,393 ÷ 1,682,574 shares) | $15.54 | |
| Maximum offering price per share (100/96.50 of $15.54) | $16.10 | |
| Class C: | ||
| Net Asset Value and offering price per share ($31,605,196 ÷ 2,062,759 shares)(a) | $15.32 | |
| Mega Cap Stock: | ||
| Net Asset Value, offering price and redemption price per share ($3,059,690,691 ÷ 195,091,909 shares) | $15.68 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($148,414,212 ÷ 9,453,992 shares) | $15.70 | |
| Class Z: | ||
| Net Asset Value, offering price and redemption price per share ($2,414,376 ÷ 154,276 shares) | $15.65 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended June 30, 2016 | ||
| Investment Income | ||
| Dividends | $81,969,038 | |
| Income from Fidelity Central Funds | 191,985 | |
| Total income | 82,161,023 | |
| Expenses | ||
| Management fee | $15,299,219 | |
| Transfer agent fees | 6,738,746 | |
| Distribution and service plan fees | 673,580 | |
| Accounting and security lending fees | 993,083 | |
| Custodian fees and expenses | 60,583 | |
| Independent trustees' fees and expenses | 15,122 | |
| Registration fees | 237,221 | |
| Audit | 54,591 | |
| Legal | 11,119 | |
| Interest | 3,242 | |
| Miscellaneous | 24,797 | |
| Total expenses before reductions | 24,111,303 | |
| Expense reductions | (93,652) | 24,017,651 |
| Net investment income (loss) | 58,143,372 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 13,856,630 | |
| Foreign currency transactions | 22,650 | |
| Written options | (160,881) | |
| Total net realized gain (loss) | 13,718,399 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (159,461,002) | |
| Assets and liabilities in foreign currencies | (10,246) | |
| Written options | 317,883 | |
| Total change in net unrealized appreciation (depreciation) | (159,153,365) | |
| Net gain (loss) | (145,434,966) | |
| Net increase (decrease) in net assets resulting from operations | $(87,291,594) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $58,143,372 | $52,928,055 |
| Net realized gain (loss) | 13,718,399 | 352,238,859 |
| Change in net unrealized appreciation (depreciation) | (159,153,365) | (177,970,747) |
| Net increase (decrease) in net assets resulting from operations | (87,291,594) | 227,196,167 |
| Distributions to shareholders from net investment income | (52,372,529) | (46,829,535) |
| Distributions to shareholders from net realized gain | (87,099,408) | (111,240,730) |
| Total distributions | (139,471,937) | (158,070,265) |
| Share transactions - net increase (decrease) | (102,232,897) | (48,371,272) |
| Total increase (decrease) in net assets | (328,996,428) | 20,754,630 |
| Net Assets | ||
| Beginning of period | 3,666,066,850 | 3,645,312,220 |
| End of period | $3,337,070,422 | $3,666,066,850 |
| Other Information | ||
| Undistributed net investment income end of period | $25,156,900 | $26,500,350 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class A
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.56 | $16.32 | $13.51 | $11.05 | $10.37 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .23 | .18 | .18 | .17 | .13 |
| Net realized and unrealized gain (loss) | (.65) | .71 | 3.00 | 2.43 | .64 |
| Total from investment operations | (.42) | .89 | 3.18 | 2.60 | .77 |
| Distributions from net investment income | (.18) | (.17) | (.16) | (.14) | (.09) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.58) | (.65) | (.37) | (.14) | (.09) |
| Net asset value, end of period | $15.56 | $16.56 | $16.32 | $13.51 | $11.05 |
| Total ReturnB,C,D | (2.56)% | 5.69% | 23.88% | 23.78% | 7.57% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .95% | 1.05% | .96% | .98% | 1.02% |
| Expenses net of fee waivers, if any | .95% | 1.05% | .96% | .98% | 1.02% |
| Expenses net of all reductions | .95% | 1.05% | .96% | .98% | 1.02% |
| Net investment income (loss) | 1.46% | 1.10% | 1.19% | 1.37% | 1.28% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $68,801 | $117,385 | $77,335 | $20,336 | $8,527 |
| Portfolio turnover rateG,H | 25% | 22%H | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class T
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.57 | $16.31 | $13.51 | $11.05 | $10.38 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .19 | .16 | .14 | .14 | .10 |
| Net realized and unrealized gain (loss) | (.65) | .70 | 3.00 | 2.43 | .64 |
| Total from investment operations | (.46) | .86 | 3.14 | 2.57 | .74 |
| Distributions from net investment income | (.16) | (.13) | (.13) | (.11) | (.07) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.57)B | (.60) | (.34) | (.11) | (.07) |
| Net asset value, end of period | $15.54 | $16.57 | $16.31 | $13.51 | $11.05 |
| Total ReturnC,D | (2.83)% | 5.53% | 23.54% | 23.44% | 7.19% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.21% | 1.21% | 1.22% | 1.26% | 1.32% |
| Expenses net of fee waivers, if any | 1.21% | 1.20% | 1.22% | 1.26% | 1.32% |
| Expenses net of all reductions | 1.20% | 1.20% | 1.22% | 1.26% | 1.32% |
| Net investment income (loss) | 1.21% | .95% | .92% | 1.09% | .98% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $26,145 | $23,231 | $15,728 | $8,377 | $2,293 |
| Portfolio turnover rateG | 25% | 22%H | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.57 per share is comprised of distributions from net investment income of $.164 and distributions from net realized gain of $.404 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class C
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.35 | $16.12 | $13.38 | $10.93 | $10.28 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .11 | .07 | .06 | .07 | .05 |
| Net realized and unrealized gain (loss) | (.64) | .71 | 2.97 | 2.42 | .64 |
| Total from investment operations | (.53) | .78 | 3.03 | 2.49 | .69 |
| Distributions from net investment income | (.09) | (.08) | (.08) | (.04) | (.04) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.50) | (.55) | (.29) | (.04) | (.04) |
| Net asset value, end of period | $15.32 | $16.35 | $16.12 | $13.38 | $10.93 |
| Total ReturnB,C,D | (3.32)% | 5.05% | 22.90% | 22.83% | 6.74% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.70% | 1.70% | 1.71% | 1.75% | 1.79% |
| Expenses net of fee waivers, if any | 1.70% | 1.70% | 1.71% | 1.75% | 1.79% |
| Expenses net of all reductions | 1.69% | 1.70% | 1.71% | 1.75% | 1.79% |
| Net investment income (loss) | .72% | .45% | .43% | .59% | .51% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $31,605 | $34,790 | $16,600 | $7,938 | $2,845 |
| Portfolio turnover rateG,H | 25% | 22%H | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.72 | $16.44 | $13.60 | $11.11 | $10.43 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .27 | .24 | .22 | .20 | .16 |
| Net realized and unrealized gain (loss) | (.66) | .72 | 3.02 | 2.46 | .64 |
| Total from investment operations | (.39) | .96 | 3.24 | 2.66 | .80 |
| Distributions from net investment income | (.25) | (.21) | (.19) | (.17) | (.12) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.65) | (.68) | (.40) | (.17) | (.12) |
| Net asset value, end of period | $15.68 | $16.72 | $16.44 | $13.60 | $11.11 |
| Total ReturnB | (2.36)% | 6.13% | 24.18% | 24.17% | 7.83% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .69% | .67% | .68% | .70% | .76% |
| Expenses net of fee waivers, if any | .69% | .67% | .68% | .70% | .76% |
| Expenses net of all reductions | .68% | .67% | .68% | .70% | .75% |
| Net investment income (loss) | 1.73% | 1.48% | 1.47% | 1.64% | 1.55% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $3,059,691 | $3,300,700 | $2,860,197 | $2,214,592 | $1,287,144 |
| Portfolio turnover rateE,F | 25% | 22%F | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class I
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.73 | $16.39 | $13.55 | $11.08 | $10.40 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .27 | .24 | .22 | .20 | .16 |
| Net realized and unrealized gain (loss) | (.65) | .72 | 3.02 | 2.44 | .63 |
| Total from investment operations | (.38) | .96 | 3.24 | 2.64 | .79 |
| Distributions from net investment income | (.24) | (.15) | (.18) | (.17) | (.11) |
| Distributions from net realized gain | (.40) | (.47) | (.21) | – | – |
| Total distributions | (.65) | (.62) | (.40) | (.17) | (.11) |
| Net asset value, end of period | $15.70 | $16.73 | $16.39 | $13.55 | $11.08 |
| Total ReturnB,C | (2.31)% | 6.11% | 24.23% | 24.06% | 7.77% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .68% | .69% | .71% | .74% | .78% |
| Expenses net of fee waivers, if any | .68% | .68% | .71% | .74% | .78% |
| Expenses net of all reductions | .68% | .68% | .71% | .74% | .77% |
| Net investment income (loss) | 1.73% | 1.47% | 1.43% | 1.61% | 1.53% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $148,414 | $186,637 | $674,416 | $312,814 | $175,833 |
| Portfolio turnover rateF,G | 25% | 22%G | 28% | 29% | 57% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Mega Cap Stock Fund Class Z
| Years ended June 30, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | |||
| Net asset value, beginning of period | $16.69 | $16.40 | $14.31 |
| Income from Investment Operations | |||
| Net investment income (loss)B | .29 | .27 | .21 |
| Net realized and unrealized gain (loss) | (.66) | .72 | 2.20 |
| Total from investment operations | (.37) | .99 | 2.41 |
| Distributions from net investment income | (.27) | (.23) | (.10) |
| Distributions from net realized gain | (.40) | (.47) | (.21) |
| Total distributions | (.67) | (.70) | (.32) |
| Net asset value, end of period | $15.65 | $16.69 | $16.40 |
| Total ReturnC,D | (2.21)% | 6.33% | 17.06% |
| Ratios to Average Net AssetsE,F | |||
| Expenses before reductions | .54% | .54% | .54%G |
| Expenses net of fee waivers, if any | .54% | .54% | .54%G |
| Expenses net of all reductions | .53% | .54% | .54%G |
| Net investment income (loss) | 1.88% | 1.61% | 1.59%G |
| Supplemental Data | |||
| Net assets, end of period (000 omitted) | $2,414 | $2,449 | $117 |
| Portfolio turnover rateH,I | 25% | 22%I | 28%G |
A For the period August 13, 2013 (commencement of sale of shares) to June 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
1. Organization.
Fidelity Mega Cap Stock Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Mega Cap Stock, Class I (formerly Institutional Class) and Class Z 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.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period July 1, 2015 through June 24, 2016.
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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price 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 June 30, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, Partnerships, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $681,059,422 |
| Gross unrealized depreciation | (179,111,333) |
| Net unrealized appreciation (depreciation) on securities | $501,948,089 |
| Tax Cost | $2,841,620,091 |
The Fund intends to elect to defer to its next fiscal year $4,177,604 of capital losses recognized during the period November 1, 2015 to June 30, 2016.
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $25,157,344 |
| Net unrealized appreciation (depreciation) on securities and other investments | $502,248,580 |
The tax character of distributions paid was as follows:
| Undistributed tax-exempt income | $– |
| Undistributed ordinary income | $25,157,344 |
| Net unrealized appreciation (depreciation) on securities and other investments | $502,248,580 |
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. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including options. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded options may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Options. Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price between or on certain dates. Options obligate the seller (writer) to buy (put) or sell (call) an underlying instrument at the exercise or strike price or cash settle an underlying derivative instrument if the holder exercises the option on or before the expiration date. The Fund uses exchange-traded options to manage its exposure to the market.
Upon entering into an options contract, a fund will pay or receive a premium. Premiums paid on purchased options are reflected as cost of investments and premiums received on written options are reflected as a liability on the Statement of Assets and Liabilities. Certain options may be purchased or written with premiums to be paid or received on a future date. Options are valued daily and any unrealized appreciation (depreciation) is reflected on the Statement of Assets and Liabilities. When an option is exercised, the cost or proceeds of the underlying instrument purchased or sold is adjusted by the amount of the premium. When an option is closed the Fund will realize a gain or loss depending on whether the proceeds or amount paid for the closing sale transaction is greater or less than the premium received or paid. When an option expires, gains and losses are realized to the extent of premiums received and paid, respectively. The net realized and unrealized gains (losses) on purchased options are included on the Statement of Operations in net realized gain (loss) and change in net unrealized appreciation (depreciation) on investment securities. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on written options are reflected separately on the Statement of Operations.
Any open options at period end are presented in the Schedule of Investments under the captions "Purchased Options," "Purchased Swaptions," "Written Options" and "Written Swaptions," as applicable, and are representative of volume of activity during the period.
The following is a summary of the Fund's written options activity:
| [[Commodity Risk | Commodity risk is the risk that the value of a commodity will fluctuate as a result of changes in market prices.]] |
| [[Credit Risk | Credit risk relates to the ability of the issuer of a financial instrument to make further principal or interest payments on an obligation or commitment that it has to the Fund.]] |
| [[Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment.]] |
| [[Foreign Exchange Risk | Foreign exchange rate risk relates to fluctuations in the value of an asset or liability due to changes in currency exchange rates.]] |
| [[Interest Rate Risk | Interest rate risk relates to the fluctuations in the value of interest-bearing securities due to changes in the prevailing levels of market interest rates.]] |
Writing puts and buying calls tend to increase exposure to the underlying instrument while buying puts and writing calls tend to decrease exposure to the underlying instrument. For purchased options, risk of loss is limited to the premium paid, and for written options, risk of loss is the change in value in excess of the premium received.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $841,341,978 and $1,021,885,711, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (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 .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .45% 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% | $219,724 | $– |
| Class T | .25% | .25% | 118,040 | – |
| Class B | .75% | .25% | 6,519 | 4,891 |
| Class C | .75% | .25% | 329,297 | 93,979 |
| $673,580 | $98,870 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $37,970 |
| Class T | 5,720 |
| Class B(a) | 273 |
| Class C(a) | 12,296 |
| $56,259 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund, except for Class Z. FIIOC receives an asset-based fee of Class Z's average net assets. 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 | $188,140 | .21 |
| Class T | 51,376 | .22 |
| Class B | 1,800 | .27 |
| Class C | 68,303 | .21 |
| Mega Cap Stock | 6,112,204 | .20 |
| Class I | 315,808 | .19 |
| Class Z | 1,115 | .05 |
| $6,738,746 |
(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.
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 $16,503 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $20,553,231 | .44% | $3,242 |
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 $5,334 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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 $136,226. During the period, there were no securities loaned to FCM.
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 $66,297 for the period. In addition, 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. During the period, these credits reduced the Fund's custody expenses by $31.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $27,324.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Class A | $1,080,757 | $950,795 |
| Class T | 237,487 | 142,768 |
| Class B | 2,701 | 987 |
| Class C | 200,810 | 106,396 |
| Mega Cap Stock | 48,178,641 | 44,068,113 |
| Class I | 2,632,093 | 1,558,917 |
| Class Z | 40,040 | 1,559 |
| Total | $52,372,529 | $46,829,535 |
| From net realized gain | ||
| Class A | $2,557,147 | $2,510,571 |
| Class T | 579,808 | 494,206 |
| Class B | 19,784 | 24,560 |
| Class C | 882,477 | 584,855 |
| Mega Cap Stock | 78,620,158 | 102,921,747 |
| Class I | 4,380,245 | 4,701,472 |
| Class Z | 59,789 | 3,319 |
| Total | $87,099,408 | $111,240,730 |
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 | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Class A | ||||
| Shares sold | 2,249,513 | 5,262,936 | $35,033,810 | $85,912,467 |
| Reinvestment of distributions | 222,669 | 215,202 | 3,545,701 | 3,382,641 |
| Shares redeemed | (5,136,376) | (3,131,094) | (81,329,239) | (51,196,855) |
| Net increase (decrease) | (2,664,194) | 2,347,044 | $(42,749,728) | $38,098,253 |
| Class T | ||||
| Shares sold | 686,666 | 751,262 | $10,511,335 | $12,268,310 |
| Reinvestment of distributions | 51,253 | 40,216 | 811,536 | 633,071 |
| Shares redeemed | (457,036) | (354,371) | (6,981,965) | (5,807,319) |
| Net increase (decrease) | 280,883 | 437,107 | $4,340,906 | $7,094,062 |
| Class B | ||||
| Shares sold | 5,282 | 9,844 | $81,885 | $158,413 |
| Reinvestment of distributions | 1,413 | 1,621 | 22,443 | 25,462 |
| Shares redeemed | (59,664) | (15,153) | (913,434) | (248,719) |
| Net increase (decrease) | (52,969) | (3,688) | $(809,106) | $(64,844) |
| Class C | ||||
| Shares sold | 670,666 | 1,409,999 | $10,277,856 | $22,764,590 |
| Reinvestment of distributions | 68,302 | 43,387 | 1,069,779 | 676,285 |
| Shares redeemed | (803,589) | (355,732) | (12,024,954) | (5,782,952) |
| Net increase (decrease) | (64,621) | 1,097,654 | $(677,319) | $17,657,923 |
| Mega Cap Stock | ||||
| Shares sold | 73,675,851 | 107,166,467 | $1,142,159,263 | $1,752,258,464 |
| Reinvestment of distributions | 7,313,288 | 8,630,508 | 116,494,236 | 136,563,203 |
| Shares redeemed | (83,289,947) | (92,388,644)(a) | (1,294,330,166) | (1,518,515,214)(a) |
| Net increase (decrease) | (2,300,808) | 23,408,331 | $(35,676,667) | $370,306,453 |
| Class I | ||||
| Shares sold | 2,012,535 | 22,065,940(b) | $31,112,150 | $358,328,832(b) |
| Reinvestment of distributions | 417,290 | 376,861 | 6,659,834 | 5,974,450 |
| Shares redeemed | (4,128,858) | (52,444,350) | (64,549,339) | (848,059,899) |
| Net increase (decrease) | (1,699,033) | (30,001,549) | $(26,777,355) | $(483,756,617) |
| Class Z | ||||
| Shares sold | 14,166 | 143,767 | $216,431 | $2,363,066 |
| Reinvestment of distributions | 6,283 | 309 | 99,829 | 4,878 |
| Shares redeemed | (12,944) | (4,443) | (199,888) | (74,446) |
| Net increase (decrease) | 7,505 | 139,633 | $116,372 | $2,293,498 |
(a) Amount includes in-kind redemptions.
(b) Amount includes in-kind exchanges.
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Mega Cap Stock Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Mega Cap Stock Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Mega Cap Stock Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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 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 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 January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Class A | .93% | |||
| Actual | $1,000.00 | $1,003.20 | $4.63 | |
| Hypothetical-C | $1,000.00 | $1,020.24 | $4.67 | |
| Class T | 1.21% | |||
| Actual | $1,000.00 | $1,001.30 | $6.02 | |
| Hypothetical-C | $1,000.00 | $1,018.85 | $6.07 | |
| Class C | 1.70% | |||
| Actual | $1,000.00 | $998.70 | $8.45 | |
| Hypothetical-C | $1,000.00 | $1,016.41 | $8.52 | |
| Mega Cap Stock | .69% | |||
| Actual | $1,000.00 | $1,003.80 | $3.44 | |
| Hypothetical-C | $1,000.00 | $1,021.43 | $3.47 | |
| Class I | .68% | |||
| Actual | $1,000.00 | $1,004.50 | $3.39 | |
| Hypothetical-C | $1,000.00 | $1,021.48 | $3.42 | |
| Class Z | .54% | |||
| Actual | $1,000.00 | $1,005.10 | $2.69 | |
| Hypothetical-C | $1,000.00 | $1,022.18 | $2.72 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The fund hereby designates as a capital gain dividend with respect to the taxable year ended June 30, 2016, $30,623,334, or, if subsequently determined to be different, the net capital gain of such year.
Class A, Class T, Class B, Class C, Mega Cap Stock, Class I and Class Z designate 100% of the dividends distributed in August and December during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A, Class T, Class B, Class C, Mega Cap Stock, Class I and Class Z designate 100% of the dividends distributed in August and December during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
AGII-ANN-0816
1.855227.108
Fidelity® Growth Discovery Fund Class K Annual Report June 30, 2016 |
|
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 1-800-835-5092 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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class K | (1.57)% | 10.95% | 8.38% |
The initial offering of Class K shares took place on May 9, 2008. Returns prior to May 9, 2008 are those of Fidelity® Growth Discovery Fund, the original class of the fund.
Prior to February 1, 2007, the fund operated under certain different investment policies and compared its performance to a different index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Growth Discovery Fund - Class K on June 30, 2006. The chart shows how the value of your investment would have changed, and also shows how the Russell 3000® Growth Index performed over the same period. See previous page for additional information regarding the performance of Class K.
| Period Ending Values | ||
| $22,368 | Fidelity® Growth Discovery Fund - Class K | |
| $22,920 | Russell 3000® Growth Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and Brexit – dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Federal’s rate-tightening posture. However, the U.K.’s late-June vote in favor of Brexit resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, with the Russell 2000® Index returning -6.73%. The tech-heavy Nasdaq Composite Index® returned -1.68%, as major constituent Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted traditionally defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager Jason Weiner: For the year, the fund’s share classes posted declines in the low single digits, lagging the 1.88% gain of the benchmark Russell 3000® Growth Index by about 3.5 percentage points. Versus the benchmark, both security and market selection dragged on results this period. In particular, picks in the pharmaceuticals, biotechnology & life sciences group hurt, as did positioning in the food, beverage & tobacco and real estate industries. Among individual detractors, an out-of-index position in Canada-based Valeant Pharmaceuticals International easily hurt the most. Valeant shares returned -87% for the fund this period, falling sharply in mid-March after the company, known for acquiring drugs then raising their prices, said it might default on its debt and would not meet earnings targets. The firm also announced an accounting error that it said would likely lead to financial restatements. The firm continues to face a U.S. Department of Justice investigation into its drug-pricing practices. We sold our position before period end. On the positive side, stock selection within the software & services group lifted relative performance. From this group, Facebook was by far the biggest individual contributor and biggest fund holding this period. Facebook shares rose 33% on the strength of its revenue from mobile advertising, which helped the social-networking company in January surpass $1 billion in quarterly earnings for the first time. The firm continued to show increased per-user revenue metrics in North America and Europe.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Facebook, Inc. Class A | 12.6 | 11.5 |
| Alphabet, Inc. Class A | 7.8 | 7.2 |
| Gilead Sciences, Inc. | 3.3 | 4.3 |
| Amazon.com, Inc. | 3.1 | 2.8 |
| Salesforce.com, Inc. | 2.8 | 2.5 |
| Danaher Corp. | 2.6 | 2.2 |
| Home Depot, Inc. | 2.5 | 2.4 |
| Electronic Arts, Inc. | 2.4 | 1.9 |
| Alphabet, Inc. Class C | 2.1 | 1.1 |
| Starbucks Corp. | 2.0 | 2.4 |
| 41.2 |
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Information Technology | 38.2 | 41.4 |
| Consumer Discretionary | 16.0 | 16.5 |
| Health Care | 13.2 | 16.4 |
| Industrials | 9.7 | 9.2 |
| Financials | 8.0 | 6.3 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016 * | ||
| Stocks | 94.0% | |
| Convertible Securities | 0.8% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 5.2% | |
* Foreign investments - 8.0%
| As of December 31, 2015* | ||
| Stocks | 92.3% | |
| Convertible Securities | 0.8% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 6.9% | |
* Foreign investments - 15.4%
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 94.0% | |||
| Shares | Value (000s) | ||
| CONSUMER DISCRETIONARY - 15.9% | |||
| Automobiles - 1.9% | |||
| Tesla Motors, Inc. (a) | 107,200 | $22,756 | |
| Diversified Consumer Services - 0.8% | |||
| Bright Horizons Family Solutions, Inc. (a) | 74,200 | 4,920 | |
| Houghton Mifflin Harcourt Co. (a) | 98,800 | 1,544 | |
| Nord Anglia Education, Inc. (a) | 111,372 | 2,354 | |
| 8,818 | |||
| Hotels, Restaurants & Leisure - 3.7% | |||
| Buffalo Wild Wings, Inc. (a) | 5,500 | 764 | |
| Dave & Buster's Entertainment, Inc. (a) | 125,400 | 5,867 | |
| Domino's Pizza, Inc. | 67,223 | 8,832 | |
| Jubilant Foodworks Ltd. | 23,677 | 400 | |
| Popeyes Louisiana Kitchen, Inc. (a) | 52,400 | 2,863 | |
| Starbucks Corp. | 417,352 | 23,839 | |
| Wingstop, Inc. | 25,700 | 700 | |
| 43,265 | |||
| Household Durables - 0.5% | |||
| Harman International Industries, Inc. | 89,500 | 6,428 | |
| Internet & Catalog Retail - 3.6% | |||
| Amazon.com, Inc. (a) | 51,900 | 37,141 | |
| Liberty Interactive Corp. (Venture Group) Series A (a) | 27,900 | 1,034 | |
| Netflix, Inc. (a) | 36,300 | 3,321 | |
| NutriSystem, Inc. | 54,500 | 1,382 | |
| 42,878 | |||
| Leisure Products - 0.0% | |||
| NJOY, Inc. (a)(b) | 56,145 | 2 | |
| Media - 0.8% | |||
| Charter Communications, Inc. Class A | 27,100 | 6,196 | |
| Sirius XM Holdings, Inc. (a)(c) | 729,800 | 2,883 | |
| 9,079 | |||
| Specialty Retail - 4.0% | |||
| AutoZone, Inc. (a) | 9,800 | 7,780 | |
| Five Below, Inc. (a) | 54,838 | 2,545 | |
| Home Depot, Inc. | 230,424 | 29,423 | |
| Lowe's Companies, Inc. | 68,000 | 5,384 | |
| MarineMax, Inc. (a) | 93,200 | 1,582 | |
| 46,714 | |||
| Textiles, Apparel & Luxury Goods - 0.6% | |||
| Kate Spade & Co. (a) | 361,470 | 7,450 | |
| TOTAL CONSUMER DISCRETIONARY | 187,390 | ||
| CONSUMER STAPLES - 7.0% | |||
| Beverages - 2.8% | |||
| Constellation Brands, Inc. Class A (sub. vtg.) | 31,900 | 5,276 | |
| Kweichow Moutai Co. Ltd. | 28,829 | 1,268 | |
| Molson Coors Brewing Co. Class B | 92,600 | 9,365 | |
| The Coca-Cola Co. | 379,036 | 17,182 | |
| 33,091 | |||
| Food & Staples Retailing - 0.9% | |||
| CVS Health Corp. | 73,600 | 7,046 | |
| Whole Foods Market, Inc. | 111,951 | 3,585 | |
| 10,631 | |||
| Household Products - 0.5% | |||
| Procter & Gamble Co. | 72,400 | 6,130 | |
| Personal Products - 0.9% | |||
| Avon Products, Inc. | 194,400 | 735 | |
| Estee Lauder Companies, Inc. Class A | 63,900 | 5,816 | |
| Herbalife Ltd. (a) | 65,533 | 3,836 | |
| 10,387 | |||
| Tobacco - 1.9% | |||
| Reynolds American, Inc. | 419,600 | 22,629 | |
| TOTAL CONSUMER STAPLES | 82,868 | ||
| ENERGY - 1.0% | |||
| Oil, Gas & Consumable Fuels - 1.0% | |||
| Anadarko Petroleum Corp. | 180,000 | 9,585 | |
| Golar LNG Ltd. | 116,661 | 1,808 | |
| 11,393 | |||
| FINANCIALS - 8.0% | |||
| Banks - 1.0% | |||
| First Republic Bank | 134,800 | 9,435 | |
| HDFC Bank Ltd. | 31,265 | 634 | |
| M&T Bank Corp. | 11,300 | 1,336 | |
| 11,405 | |||
| Capital Markets - 1.3% | |||
| BlackRock, Inc. Class A | 18,694 | 6,403 | |
| E*TRADE Financial Corp. (a) | 379,359 | 8,911 | |
| JMP Group, Inc. | 64,700 | 351 | |
| PJT Partners, Inc. (c) | 9,752 | 224 | |
| 15,889 | |||
| Diversified Financial Services - 2.6% | |||
| Berkshire Hathaway, Inc. Class B (a) | 24,800 | 3,591 | |
| CME Group, Inc. | 142,845 | 13,913 | |
| MSCI, Inc. Class A | 85,100 | 6,563 | |
| S&P Global, Inc. | 60,712 | 6,512 | |
| 30,579 | |||
| Insurance - 0.5% | |||
| Marsh & McLennan Companies, Inc. | 79,700 | 5,456 | |
| Real Estate Investment Trusts - 1.0% | |||
| American Tower Corp. | 104,400 | 11,861 | |
| Real Estate Management & Development - 1.4% | |||
| Realogy Holdings Corp. (a) | 555,381 | 16,117 | |
| Thrifts & Mortgage Finance - 0.2% | |||
| Essent Group Ltd. (a) | 102,100 | 2,227 | |
| TOTAL FINANCIALS | 93,534 | ||
| HEALTH CARE - 13.2% | |||
| Biotechnology - 8.5% | |||
| Amgen, Inc. | 78,200 | 11,898 | |
| BioMarin Pharmaceutical, Inc. (a) | 72,196 | 5,617 | |
| Cytokinetics, Inc. (a) | 25,600 | 243 | |
| Cytokinetics, Inc. warrants 6/25/17 (a) | 288,420 | 213 | |
| Gilead Sciences, Inc. | 467,863 | 39,029 | |
| Insmed, Inc. (a) | 342,678 | 3,379 | |
| Medivation, Inc. (a) | 285,300 | 17,204 | |
| Regeneron Pharmaceuticals, Inc. (a) | 19,300 | 6,740 | |
| TESARO, Inc. (a) | 30,300 | 2,547 | |
| Vertex Pharmaceuticals, Inc. (a) | 156,300 | 13,445 | |
| 100,315 | |||
| Health Care Equipment & Supplies - 2.7% | |||
| Boston Scientific Corp. (a) | 378,100 | 8,836 | |
| Edwards Lifesciences Corp. (a) | 47,500 | 4,737 | |
| Intuitive Surgical, Inc. (a) | 5,700 | 3,770 | |
| Medtronic PLC | 90,700 | 7,870 | |
| Novadaq Technologies, Inc. (a) | 256,100 | 2,520 | |
| ResMed, Inc. | 62,100 | 3,927 | |
| 31,660 | |||
| Health Care Providers & Services - 0.1% | |||
| HealthEquity, Inc. (a) | 12,900 | 392 | |
| VCA, Inc. (a) | 11,100 | 750 | |
| 1,142 | |||
| Pharmaceuticals - 1.9% | |||
| Astellas Pharma, Inc. | 1,363,100 | 21,377 | |
| Collegium Pharmaceutical, Inc. (a) | 30,900 | 366 | |
| 21,743 | |||
| TOTAL HEALTH CARE | 154,860 | ||
| INDUSTRIALS - 9.7% | |||
| Aerospace & Defense - 1.2% | |||
| Honeywell International, Inc. | 85,200 | 9,910 | |
| TransDigm Group, Inc. (a) | 14,927 | 3,936 | |
| 13,846 | |||
| Airlines - 0.7% | |||
| Ryanair Holdings PLC sponsored ADR | 116,564 | 8,106 | |
| Building Products - 0.7% | |||
| A.O. Smith Corp. | 60,944 | 5,370 | |
| Caesarstone Sdot-Yam Ltd. (a) | 81,200 | 2,823 | |
| 8,193 | |||
| Commercial Services & Supplies - 0.7% | |||
| KAR Auction Services, Inc. | 206,700 | 8,628 | |
| Electrical Equipment - 0.6% | |||
| Acuity Brands, Inc. | 23,600 | 5,852 | |
| AMETEK, Inc. | 26,045 | 1,204 | |
| 7,056 | |||
| Industrial Conglomerates - 3.1% | |||
| Danaher Corp. | 299,855 | 30,285 | |
| Roper Technologies, Inc. | 33,414 | 5,699 | |
| 35,984 | |||
| Machinery - 0.0% | |||
| Rational AG | 200 | 93 | |
| Professional Services - 2.4% | |||
| Equifax, Inc. | 57,600 | 7,396 | |
| Resources Connection, Inc. | 99,000 | 1,463 | |
| Robert Half International, Inc. | 128,100 | 4,888 | |
| TransUnion Holding Co., Inc. | 38,400 | 1,284 | |
| WageWorks, Inc. (a) | 213,473 | 12,768 | |
| 27,799 | |||
| Road & Rail - 0.0% | |||
| Swift Transporation Co. (a) | 25,500 | 393 | |
| Trading Companies & Distributors - 0.3% | |||
| HD Supply Holdings, Inc. (a) | 101,900 | 3,548 | |
| TOTAL INDUSTRIALS | 113,646 | ||
| INFORMATION TECHNOLOGY - 37.5% | |||
| Electronic Equipment & Components - 0.2% | |||
| CDW Corp. | 44,100 | 1,768 | |
| Internet Software & Services - 23.7% | |||
| Alibaba Group Holding Ltd. sponsored ADR (a) | 83,100 | 6,609 | |
| Alphabet, Inc.: | |||
| Class A | 130,052 | 91,495 | |
| Class C (a) | 35,616 | 24,650 | |
| Facebook, Inc. Class A (a) | 1,292,191 | 147,668 | |
| GoDaddy, Inc. (a) | 93,300 | 2,910 | |
| Just Dial Ltd. | 61,822 | 562 | |
| JUST EAT Ltd. (a) | 367,603 | 2,098 | |
| Shopify, Inc. Class A (a) | 19,900 | 612 | |
| Stamps.com, Inc. (a) | 26,800 | 2,343 | |
| 278,947 | |||
| IT Services - 2.5% | |||
| Gartner, Inc. Class A (a) | 30,600 | 2,981 | |
| Global Payments, Inc. | 136,700 | 9,758 | |
| Visa, Inc. Class A | 224,196 | 16,629 | |
| 29,368 | |||
| Semiconductors & Semiconductor Equipment - 0.8% | |||
| Maxim Integrated Products, Inc. | 123,305 | 4,401 | |
| Monolithic Power Systems, Inc. | 72,318 | 4,941 | |
| 9,342 | |||
| Software - 10.3% | |||
| Activision Blizzard, Inc. | 113,287 | 4,490 | |
| Adobe Systems, Inc. (a) | 161,500 | 15,470 | |
| Computer Modelling Group Ltd. | 241,400 | 1,932 | |
| CyberArk Software Ltd. (a)(c) | 41,300 | 2,007 | |
| Electronic Arts, Inc. (a) | 370,934 | 28,102 | |
| Fleetmatics Group PLC (a) | 56,200 | 2,435 | |
| Intuit, Inc. | 24,900 | 2,779 | |
| Mobileye NV (a)(c) | 503,469 | 23,230 | |
| Red Hat, Inc. (a) | 110,700 | 8,037 | |
| Salesforce.com, Inc. (a) | 412,864 | 32,786 | |
| 121,268 | |||
| TOTAL INFORMATION TECHNOLOGY | 440,693 | ||
| MATERIALS - 1.5% | |||
| Chemicals - 1.5% | |||
| Albemarle Corp. U.S. | 221,300 | 17,551 | |
| Metals & Mining - 0.0% | |||
| Orocobre Ltd. (a) | 181,246 | 651 | |
| TOTAL MATERIALS | 18,202 | ||
| TELECOMMUNICATION SERVICES - 0.2% | |||
| Diversified Telecommunication Services - 0.2% | |||
| SBA Communications Corp. Class A (a) | 23,800 | 2,569 | |
| TOTAL COMMON STOCKS | |||
| (Cost $869,263) | 1,105,155 | ||
| Convertible Preferred Stocks - 0.8% | |||
| CONSUMER DISCRETIONARY - 0.1% | |||
| Household Durables - 0.1% | |||
| Blu Homes, Inc. Series A, 5.00% (a)(b) | 239,736 | 978 | |
| INFORMATION TECHNOLOGY - 0.7% | |||
| Internet Software & Services - 0.7% | |||
| Uber Technologies, Inc. Series D, 8.00% (a)(b) | 162,572 | 7,929 | |
| IT Services - 0.0% | |||
| AppNexus, Inc. Series E (a)(b) | 48,212 | 810 | |
| TOTAL INFORMATION TECHNOLOGY | 8,739 | ||
| TOTAL CONVERTIBLE PREFERRED STOCKS | |||
| (Cost $4,596) | 9,717 | ||
| Money Market Funds - 6.7% | |||
| Fidelity Cash Central Fund, 0.43% (d) | 55,640,853 | 55,641 | |
| Fidelity Securities Lending Cash Central Fund, 0.46% (d)(e) | 22,776,259 | 22,776 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $78,417) | 78,417 | ||
| TOTAL INVESTMENT PORTFOLIO - 101.5% | |||
| (Cost $952,276) | 1,193,289 | ||
| NET OTHER ASSETS (LIABILITIES) - (1.5)% | (17,571) | ||
| NET ASSETS - 100% | $1,175,718 |
Legend
(a) Non-income producing
(b) 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 $9,719,000 or 0.8% 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost (000s) |
| AppNexus, Inc. Series E | 8/1/14 | $966 |
| Blu Homes, Inc. Series A, 5.00% | 6/21/13 | $1,108 |
| NJOY, Inc. | 9/11/13 | $454 |
| Uber Technologies, Inc. Series D, 8.00% | 6/6/14 | $2,522 |
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 |
| (Amounts in thousands) | |
| Fidelity Cash Central Fund | $196 |
| Fidelity Securities Lending Cash Central Fund | 489 |
| Total | $685 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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 |
| (Amounts in thousands) | ||||
| Investments in Securities: | ||||
| Equities: | ||||
| Consumer Discretionary | $188,368 | $186,988 | $400 | $980 |
| Consumer Staples | 82,868 | 81,600 | 1,268 | -- |
| Energy | 11,393 | 11,393 | -- | -- |
| Financials | 93,534 | 92,900 | 634 | -- |
| Health Care | 154,860 | 133,270 | 21,590 | -- |
| Industrials | 113,646 | 113,553 | 93 | -- |
| Information Technology | 449,432 | 438,033 | 2,660 | 8,739 |
| Materials | 18,202 | 17,551 | 651 | -- |
| Telecommunication Services | 2,569 | 2,569 | -- | -- |
| Money Market Funds | 78,417 | 78,417 | -- | -- |
| Total Investments in Securities: | $1,193,289 | $1,156,274 | $27,296 | $9,719 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended June 30, 2016. 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 (000s) |
| Level 1 to Level 2 | $20,238 |
| Level 2 to Level 1 | $0 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| Amounts in thousands (except per-share amounts) | June 30, 2016 | |
| Assets | ||
| Investment in securities, at value (including securities loaned of $24,204) — See accompanying schedule: Unaffiliated issuers (cost $873,859) | $1,114,872 | |
| Fidelity Central Funds (cost $78,417) | 78,417 | |
| Total Investments (cost $952,276) | $1,193,289 | |
| Receivable for investments sold | 9,531 | |
| Receivable for fund shares sold | 528 | |
| Dividends receivable | 581 | |
| Distributions receivable from Fidelity Central Funds | 55 | |
| Other receivables | 35 | |
| Total assets | 1,204,019 | |
| Liabilities | ||
| Payable for investments purchased | $3,368 | |
| Payable for fund shares redeemed | 1,415 | |
| Accrued management fee | 509 | |
| Other affiliated payables | 184 | |
| Other payables and accrued expenses | 49 | |
| Collateral on securities loaned, at value | 22,776 | |
| Total liabilities | 28,301 | |
| Net Assets | $1,175,718 | |
| Net Assets consist of: | ||
| Paid in capital | $1,092,730 | |
| Distributions in excess of net investment income | (573) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (157,440) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 241,001 | |
| Net Assets | $1,175,718 | |
| Growth Discovery: | ||
| Net Asset Value, offering price and redemption price per share ($999,716 ÷ 40,851 shares) | $24.47 | |
| Class K: | ||
| Net Asset Value, offering price and redemption price per share ($176,002 ÷ 7,189 shares) | $24.48 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Amounts in thousands | Year ended June 30, 2016 | |
| Investment Income | ||
| Dividends | $9,196 | |
| Income from Fidelity Central Funds | 685 | |
| Total income | 9,881 | |
| Expenses | ||
| Management fee | ||
| Basic fee | $6,687 | |
| Performance adjustment | 171 | |
| Transfer agent fees | 1,866 | |
| Accounting and security lending fees | 398 | |
| Custodian fees and expenses | 40 | |
| Independent trustees' fees and expenses | 5 | |
| Registration fees | 61 | |
| Audit | 62 | |
| Legal | 6 | |
| Miscellaneous | 10 | |
| Total expenses before reductions | 9,306 | |
| Expense reductions | (50) | 9,256 |
| Net investment income (loss) | 625 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 20,127 | |
| Foreign currency transactions | (26) | |
| Futures contracts | 6 | |
| Total net realized gain (loss) | 20,107 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (43,045) | |
| Futures contracts | 281 | |
| Total change in net unrealized appreciation (depreciation) | (42,764) | |
| Net gain (loss) | (22,657) | |
| Net increase (decrease) in net assets resulting from operations | $(22,032) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended June 30, 2016 | Year ended June 30, 2015 |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $625 | $3,766 |
| Net realized gain (loss) | 20,107 | 108,634 |
| Change in net unrealized appreciation (depreciation) | (42,764) | (12,280) |
| Net increase (decrease) in net assets resulting from operations | (22,032) | 100,120 |
| Distributions to shareholders from net investment income | (1,789) | (1,605) |
| Distributions to shareholders from net realized gain | (555) | – |
| Total distributions | (2,344) | (1,605) |
| Share transactions - net increase (decrease) | (80,061) | (80,798) |
| Total increase (decrease) in net assets | (104,437) | 17,717 |
| Net Assets | ||
| Beginning of period | 1,280,155 | 1,262,438 |
| End of period | $1,175,718 | $1,280,155 |
| Other Information | ||
| Undistributed net investment income end of period | $– | $1,357 |
| Distributions in excess of net investment income end of period | $(573) | $– |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Growth Discovery Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $24.93 | $23.07 | $17.45 | $15.09 | $14.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .01 | .07 | .02 | .07 | .04 |
| Net realized and unrealized gain (loss) | (.43) | 1.81 | 5.63 | 2.35 | .26 |
| Total from investment operations | (.42) | 1.88 | 5.65 | 2.42 | .30 |
| Distributions from net investment income | (.03) | (.02) | (.02) | (.06) | (.03) |
| Distributions from net realized gain | (.01) | – | (.01) | – | (.06) |
| Total distributions | (.04) | (.02) | (.03) | (.06) | (.09) |
| Net asset value, end of period | $24.47 | $24.93 | $23.07 | $17.45 | $15.09 |
| Total ReturnB | (1.68)% | 8.17% | 32.40% | 16.09% | 2.07% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .78% | .77% | .81% | .88% | .81% |
| Expenses net of fee waivers, if any | .78% | .77% | .81% | .88% | .81% |
| Expenses net of all reductions | .78% | .77% | .81% | .87% | .80% |
| Net investment income (loss) | .03% | .27% | .10% | .42% | .27% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $1,000 | $1,078 | $1,072 | $767 | $875 |
| Portfolio turnover rateE | 57% | 51% | 70% | 62% | 74% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Growth Discovery Fund Class K
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $24.94 | $23.09 | $17.45 | $15.09 | $14.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .04 | .10 | .05 | .09 | .06 |
| Net realized and unrealized gain (loss) | (.43) | 1.82 | 5.63 | 2.36 | .26 |
| Total from investment operations | (.39) | 1.92 | 5.68 | 2.45 | .32 |
| Distributions from net investment income | (.06) | (.07) | (.04) | (.09) | (.06) |
| Distributions from net realized gain | (.01) | – | (.01) | – | (.06) |
| Total distributions | (.07) | (.07) | (.04)B | (.09) | (.11)C |
| Net asset value, end of period | $24.48 | $24.94 | $23.09 | $17.45 | $15.09 |
| Total ReturnD | (1.57)% | 8.32% | 32.62% | 16.28% | 2.27% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .66% | .64% | .68% | .72% | .64% |
| Expenses net of fee waivers, if any | .66% | .64% | .68% | .72% | .64% |
| Expenses net of all reductions | .65% | .64% | .67% | .71% | .63% |
| Net investment income (loss) | .16% | .40% | .24% | .58% | .44% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $176 | $202 | $190 | $137 | $144 |
| Portfolio turnover rateG | 57% | 51% | 70% | 62% | 74% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.04 per share is comprised of distributions from net investment income of $.036 and distributions from net realized gain of $.006 per share.
C Total distributions of $.11 per share is comprised of distributions from net investment income of $.058 and distributions from net realized gain of $.055 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Growth Discovery Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Growth Discovery and Class K 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of June 30, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. 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 fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, partnerships, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $284,013 |
| Gross unrealized depreciation | (44,315) |
| Net unrealized appreciation (depreciation) on securities | $239,698 |
| Tax Cost | $953,591 |
The tax-based components of distributable earnings as of period end were as follows:
| Capital loss carryforward | $(136,052) |
| Net unrealized appreciation (depreciation) on securities and other investments | $239,685 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2018 | $(136,052) |
The Fund intends to elect to defer to its next fiscal year $20,072 of capital losses recognized during the period November 1, 2015 to June 30, 2016.
The tax character of distributions paid was as follows:
| June 30, 2016 | June 30, 2015 | |
| Ordinary Income | $2,344 | $ 1,605 |
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. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end.
During the period the Fund recognized net realized gain (loss) of $6 and a change in net unrealized appreciation (depreciation) of $281 related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $652,282 and $751,010, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Growth Discovery as compared to its benchmark index, the Russell 3000 Growth Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .56% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
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 Growth Discovery. FIIOC receives an asset-based fee of Class K's average net assets. 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 | |
| Growth Discovery | $1,780 | .17 |
| Class K | 86 | .05 |
| $ 1,866 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $9 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 $2 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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. The value of securities loaned to FCM at period end was $2,815. 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 $489, including $26 from securities loaned to FCM.
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 $40 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 $10.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Growth Discovery | $1,330 | $1,051 |
| Class K | 459 | 554 |
| Total | $1,789 | $1,605 |
| From net realized gain | ||
| Growth Discovery | $471 | $– |
| Class K | 84 | – |
| Total | $555 | $– |
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 | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Growth Discovery | ||||
| Shares sold | 5,290 | 6,606 | $128,658 | $156,958 |
| Reinvestment of distributions | 68 | 43 | 1,697 | 996 |
| Shares redeemed | (7,766) | (9,855) | (188,307) | (234,518) |
| Net increase (decrease) | (2,408) | (3,206) | $(57,952) | $(76,564) |
| Class K | ||||
| Shares sold | 1,980 | 2,148 | $48,709 | $51,064 |
| Reinvestment of distributions | 22 | 24 | 543 | 554 |
| Shares redeemed | (2,901) | (2,328) | (71,361) | (55,852) |
| Net increase (decrease) | (899) | (156) | $(22,109) | $(4,234) |
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Growth Discovery Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Growth Discovery Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Growth Discovery Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-835-5092.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Melissa M. Reilly (1971)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Ms. Reilly also serves as Vice President of other funds. Ms. Reilly is an employee of Fidelity Investments (2004-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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 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 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.
| Annualized Expense Ratio-A | Beginning Account Value January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Growth Discovery | .78% | |||
| Actual | $1,000.00 | $968.30 | $3.82 | |
| Hypothetical-C | $1,000.00 | $1,020.98 | $3.92 | |
| Class K | .66% | |||
| Actual | $1,000.00 | $969.10 | $3.23 | |
| Hypothetical-C | $1,000.00 | $1,021.58 | $3.32 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
Growth Discovery and Class K designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Growth Discovery and Class K designates 100% of the dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
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CII-K-ANN-0816
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Fidelity® Fund Annual Report June 30, 2016 |
|
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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Fund | (0.83)% | 9.90% | 6.76% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Fund, a class of the fund, on June 30, 2006.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $19,230 | Fidelity® Fund | |
| $20,465 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and the U.K.’s relationship with the European Union – dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Fed’s rate-tightening posture. However, the U.K.’s late-June vote in favor of exiting the EU resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, as the Russell 2000® Index returned -6.73%. The Nasdaq Composite Index® returned -1.68%, as Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager John Avery: For the year, the fund’s share classes considerably trailed the S&P 500®. Versus that index, stock selection in health care, financials and consumer staples, along with largely avoiding telecommunication services and an underweighting in utilities, detracted from performance. Untimely positioning in PC-software maker Microsoft cost us the most relative to the benchmark. The stock enjoyed a robust rally in October 2015. I purchased the stock that same month but unfortunately missed most of the rally, and the shares treaded water for the remainder of the period. Other detractors included pharmaceutical stock Allergan and biotech holding Biogen, the latter of which I liquidated in June. Fertilizer maker CF Industries Holdings, which I also sold, was hurt by a near-perfect growing season that led to a drop in corn’s price. Conversely, an underweighting in energy and stock selection in consumer discretionary added value. Among individual holdings, social media giant Facebook was the fund’s top relative contributor. Our investments here rose 32% for the period on continued growth in its user base and higher mobile advertising revenue. Facebook was our second-largest holding at period end. An out-of-benchmark stake in Danish biotechnology company Genmab also helped, as did an overweighting in online retailer Amazon.com.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Facebook, Inc. Class A | 3.3 | 3.2 |
| Berkshire Hathaway, Inc. Class B | 2.7 | 1.8 |
| Amazon.com, Inc. | 2.5 | 3.1 |
| Johnson & Johnson | 2.2 | 0.0 |
| Medtronic PLC | 2.2 | 1.7 |
| Amphenol Corp. Class A | 2.1 | 1.8 |
| Alphabet, Inc. Class A | 2.1 | 2.6 |
| Alphabet, Inc. Class C | 2.1 | 2.4 |
| Visa, Inc. Class A | 2.1 | 2.0 |
| CVS Health Corp. | 2.0 | 1.8 |
| 23.3 |
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Information Technology | 20.3 | 22.4 |
| Health Care | 14.3 | 13.3 |
| Consumer Staples | 13.6 | 9.8 |
| Consumer Discretionary | 12.5 | 14.8 |
| Financials | 11.9 | 18.3 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016* | ||
| Stocks | 98.0% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 2.0% | |
* Foreign investments - 8.3%
| As of December 31, 2015* | ||
| Stocks and Equity Futures | 99.3% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.7% | |
* Foreign investments - 9.8%
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 98.0% | |||
| Shares | Value (000s) | ||
| CONSUMER DISCRETIONARY - 12.5% | |||
| Diversified Consumer Services - 0.7% | |||
| ServiceMaster Global Holdings, Inc. (a) | 750,000 | $29,850 | |
| Hotels, Restaurants & Leisure - 3.1% | |||
| Domino's Pizza, Inc. | 271,400 | 35,657 | |
| Starbucks Corp. | 1,133,996 | 64,774 | |
| Vail Resorts, Inc. | 275,000 | 38,013 | |
| 138,444 | |||
| Internet & Catalog Retail - 2.5% | |||
| Amazon.com, Inc. (a) | 155,000 | 110,921 | |
| Media - 1.9% | |||
| Comcast Corp. Class A | 1,170,700 | 76,318 | |
| Lions Gate Entertainment Corp. (b) | 400,000 | 8,092 | |
| 84,410 | |||
| Specialty Retail - 3.9% | |||
| AutoZone, Inc. (a) | 72,300 | 57,395 | |
| Home Depot, Inc. | 500,000 | 63,845 | |
| L Brands, Inc. | 170,000 | 11,412 | |
| TJX Companies, Inc. | 558,800 | 43,156 | |
| 175,808 | |||
| Textiles, Apparel & Luxury Goods - 0.4% | |||
| NIKE, Inc. Class B | 348,200 | 19,221 | |
| TOTAL CONSUMER DISCRETIONARY | 558,654 | ||
| CONSUMER STAPLES - 13.6% | |||
| Beverages - 2.9% | |||
| Dr. Pepper Snapple Group, Inc. | 350,000 | 33,821 | |
| Molson Coors Brewing Co. Class B | 204,200 | 20,651 | |
| The Coca-Cola Co. | 1,600,000 | 72,528 | |
| 127,000 | |||
| Food & Staples Retailing - 2.7% | |||
| Costco Wholesale Corp. | 200,000 | 31,408 | |
| CVS Health Corp. | 915,200 | 87,621 | |
| 119,029 | |||
| Food Products - 1.9% | |||
| Mead Johnson Nutrition Co. Class A | 250,000 | 22,688 | |
| Mondelez International, Inc. | 1,379,600 | 62,786 | |
| 85,474 | |||
| Household Products - 2.4% | |||
| Procter & Gamble Co. | 1,000,000 | 84,670 | |
| Spectrum Brands Holdings, Inc. (b) | 200,000 | 23,862 | |
| 108,532 | |||
| Personal Products - 1.0% | |||
| Estee Lauder Companies, Inc. Class A | 492,300 | 44,809 | |
| Tobacco - 2.7% | |||
| Altria Group, Inc. | 700,000 | 48,272 | |
| Imperial Tobacco Group PLC | 600,000 | 32,540 | |
| Reynolds American, Inc. | 750,000 | 40,448 | |
| 121,260 | |||
| TOTAL CONSUMER STAPLES | 606,104 | ||
| ENERGY - 5.7% | |||
| Energy Equipment & Services - 0.7% | |||
| Schlumberger Ltd. | 385,000 | 30,446 | |
| Oil, Gas & Consumable Fuels - 5.0% | |||
| Anadarko Petroleum Corp. | 435,650 | 23,198 | |
| Cheniere Energy Partners LP | 581,461 | 17,432 | |
| Chevron Corp. | 800,000 | 83,864 | |
| ConocoPhillips Co. | 973,100 | 42,427 | |
| EQT Midstream Partners LP | 193,700 | 15,554 | |
| Kinder Morgan, Inc. | 500,000 | 9,360 | |
| Teekay LNG Partners LP | 1,000,000 | 11,250 | |
| Williams Partners LP | 550,000 | 19,052 | |
| 222,137 | |||
| TOTAL ENERGY | 252,583 | ||
| FINANCIALS - 11.9% | |||
| Banks - 2.9% | |||
| JPMorgan Chase & Co. | 748,900 | 46,537 | |
| M&T Bank Corp. | 155,000 | 18,326 | |
| SunTrust Banks, Inc. | 241,300 | 9,913 | |
| Wells Fargo & Co. | 1,178,367 | 55,772 | |
| 130,548 | |||
| Diversified Financial Services - 4.8% | |||
| Berkshire Hathaway, Inc. Class B (a) | 828,900 | 120,016 | |
| Moody's Corp. | 255,200 | 23,915 | |
| MSCI, Inc. Class A | 450,000 | 34,704 | |
| S&P Global, Inc. | 315,725 | 33,865 | |
| 212,500 | |||
| Insurance - 1.4% | |||
| American International Group, Inc. | 277,500 | 14,677 | |
| FNF Group | 500,000 | 18,750 | |
| Marsh & McLennan Companies, Inc. | 450,000 | 30,807 | |
| 64,234 | |||
| Real Estate Investment Trusts - 2.8% | |||
| American Tower Corp. | 484,100 | 54,999 | |
| Easterly Government Properties, Inc. | 1,211,300 | 23,899 | |
| Public Storage | 175,000 | 44,728 | |
| 123,626 | |||
| TOTAL FINANCIALS | 530,908 | ||
| HEALTH CARE - 14.3% | |||
| Biotechnology - 3.2% | |||
| Actelion Ltd. | 100,000 | 16,840 | |
| Amgen, Inc. | 551,300 | 83,880 | |
| Genmab A/S (a) | 95,000 | 17,323 | |
| Vertex Pharmaceuticals, Inc. (a) | 300,000 | 25,806 | |
| 143,849 | |||
| Health Care Equipment & Supplies - 3.4% | |||
| Boston Scientific Corp. (a) | 2,312,000 | 54,031 | |
| Medtronic PLC | 1,109,700 | 96,289 | |
| 150,320 | |||
| Life Sciences Tools & Services - 1.5% | |||
| Thermo Fisher Scientific, Inc. | 457,700 | 67,630 | |
| Pharmaceuticals - 6.2% | |||
| Allergan PLC (a) | 296,900 | 68,611 | |
| Bristol-Myers Squibb Co. | 930,000 | 68,402 | |
| Johnson & Johnson | 800,000 | 97,040 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 803,900 | 40,380 | |
| 274,433 | |||
| TOTAL HEALTH CARE | 636,232 | ||
| INDUSTRIALS - 9.4% | |||
| Aerospace & Defense - 6.1% | |||
| Honeywell International, Inc. | 520,400 | 60,533 | |
| Huntington Ingalls Industries, Inc. | 360,500 | 60,575 | |
| Northrop Grumman Corp. | 175,000 | 38,899 | |
| Raytheon Co. | 500,000 | 67,975 | |
| United Technologies Corp. | 400,000 | 41,020 | |
| 269,002 | |||
| Building Products - 1.0% | |||
| Lennox International, Inc. | 200,000 | 28,520 | |
| Masco Corp. | 500,000 | 15,470 | |
| 43,990 | |||
| Industrial Conglomerates - 2.2% | |||
| Danaher Corp. | 703,200 | 71,023 | |
| General Electric Co. | 900,000 | 28,332 | |
| 99,355 | |||
| Machinery - 0.1% | |||
| Xylem, Inc. | 110,100 | 4,916 | |
| TOTAL INDUSTRIALS | 417,263 | ||
| INFORMATION TECHNOLOGY - 20.3% | |||
| Electronic Equipment & Components - 2.1% | |||
| Amphenol Corp. Class A | 1,666,776 | 95,556 | |
| Internet Software & Services - 7.6% | |||
| Alphabet, Inc.: | |||
| Class A | 135,600 | 95,399 | |
| Class C (a) | 136,027 | 94,144 | |
| Facebook, Inc. Class A (a) | 1,289,200 | 147,325 | |
| 336,868 | |||
| IT Services - 3.6% | |||
| MasterCard, Inc. Class A | 760,300 | 66,952 | |
| Visa, Inc. Class A | 1,246,400 | 92,445 | |
| 159,397 | |||
| Semiconductors & Semiconductor Equipment - 1.9% | |||
| Lam Research Corp. | 300,000 | 25,218 | |
| NXP Semiconductors NV (a) | 298,217 | 23,362 | |
| Texas Instruments, Inc. | 600,000 | 37,590 | |
| 86,170 | |||
| Software - 3.6% | |||
| Adobe Systems, Inc. (a) | 774,400 | 74,180 | |
| Microsoft Corp. | 900,000 | 46,053 | |
| Salesforce.com, Inc. (a) | 500,000 | 39,705 | |
| 159,938 | |||
| Technology Hardware, Storage & Peripherals - 1.5% | |||
| Apple, Inc. | 723,900 | 69,205 | |
| TOTAL INFORMATION TECHNOLOGY | 907,134 | ||
| MATERIALS - 5.1% | |||
| Chemicals - 3.4% | |||
| E.I. du Pont de Nemours & Co. | 625,000 | 40,500 | |
| Ecolab, Inc. | 402,500 | 47,737 | |
| Monsanto Co. | 328,500 | 33,970 | |
| W.R. Grace & Co. | 400,000 | 29,284 | |
| 151,491 | |||
| Construction Materials - 0.7% | |||
| Vulcan Materials Co. | 262,299 | 31,570 | |
| Containers & Packaging - 0.5% | |||
| Ball Corp. | 300,000 | 21,687 | |
| Metals & Mining - 0.5% | |||
| Franco-Nevada Corp. | 300,000 | 22,812 | |
| TOTAL MATERIALS | 227,560 | ||
| TELECOMMUNICATION SERVICES - 1.8% | |||
| Diversified Telecommunication Services - 1.8% | |||
| AT&T, Inc. | 1,900,000 | 82,099 | |
| UTILITIES - 3.4% | |||
| Electric Utilities - 1.7% | |||
| NextEra Energy, Inc. | 350,000 | 45,640 | |
| Xcel Energy, Inc. | 650,000 | 29,107 | |
| 74,747 | |||
| Multi-Utilities - 1.3% | |||
| Dominion Resources, Inc. | 300,000 | 23,379 | |
| DTE Energy Co. | 350,000 | 34,692 | |
| 58,071 | |||
| Water Utilities - 0.4% | |||
| American Water Works Co., Inc. | 200,000 | 16,902 | |
| TOTAL UTILITIES | 149,720 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $3,324,276) | 4,368,257 | ||
| Principal Amount (000s) | Value (000s) | ||
| U.S. Treasury Obligations - 0.1% | |||
| U.S. Treasury Bills, yield at date of purchase 0.22% to 0.25% 7/14/16 to 7/28/16 (c) | |||
| (Cost $4,509) | 4,510 | 4,510 | |
| Shares | Value (000s) | ||
| Money Market Funds - 2.8% | |||
| Fidelity Cash Central Fund, 0.43% (d) | 116,158,266 | $116,158 | |
| Fidelity Securities Lending Cash Central Fund, 0.46% (d)(e) | 7,647,500 | 7,648 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $123,806) | 123,806 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.9% | |||
| (Cost $3,452,591) | 4,496,573 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.9)% | (38,972) | ||
| NET ASSETS - 100% | $4,457,601 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $1,420,000.
(d) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
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 |
| (Amounts in thousands) | |
| Fidelity Cash Central Fund | $265 |
| Fidelity Securities Lending Cash Central Fund | 247 |
| Total | $512 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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 |
| (Amounts in thousands) | ||||
| Investments in Securities: | ||||
| Equities: | ||||
| Consumer Discretionary | $558,654 | $558,654 | $-- | $-- |
| Consumer Staples | 606,104 | 573,564 | 32,540 | -- |
| Energy | 252,583 | 252,583 | -- | -- |
| Financials | 530,908 | 530,908 | -- | -- |
| Health Care | 636,232 | 602,069 | 34,163 | -- |
| Industrials | 417,263 | 417,263 | -- | -- |
| Information Technology | 907,134 | 907,134 | -- | -- |
| Materials | 227,560 | 227,560 | -- | -- |
| Telecommunication Services | 82,099 | 82,099 | -- | -- |
| Utilities | 149,720 | 149,720 | -- | -- |
| U.S. Government and Government Agency Obligations | 4,510 | -- | 4,510 | -- |
| Money Market Funds | 123,806 | 123,806 | -- | -- |
| Total Investments in Securities: | $4,496,573 | $4,425,360 | $71,213 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended June 30, 2016. 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 (000s) |
| Level 1 to Level 2 | $80,176 |
| Level 2 to Level 1 | $0 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| Amounts in thousands (except per-share amounts) | June 30, 2016 | |
| Assets | ||
| Investment in securities, at value (including securities loaned of $7,262) — See accompanying schedule: Unaffiliated issuers (cost $3,328,785) | $4,372,767 | |
| Fidelity Central Funds (cost $123,806) | 123,806 | |
| Total Investments (cost $3,452,591) | $4,496,573 | |
| Cash | 1 | |
| Foreign currency held at value (cost $224) | 224 | |
| Receivable for investments sold | 48,238 | |
| Receivable for fund shares sold | 1,472 | |
| Dividends receivable | 4,392 | |
| Distributions receivable from Fidelity Central Funds | 29 | |
| Receivable for daily variation margin for derivative instruments | 307 | |
| Other receivables | 197 | |
| Total assets | 4,551,433 | |
| Liabilities | ||
| Payable for investments purchased | $80,382 | |
| Payable for fund shares redeemed | 3,709 | |
| Accrued management fee | 1,262 | |
| Other affiliated payables | 604 | |
| Other payables and accrued expenses | 227 | |
| Collateral on securities loaned, at value | 7,648 | |
| Total liabilities | 93,832 | |
| Net Assets | $4,457,601 | |
| Net Assets consist of: | ||
| Paid in capital | $3,251,258 | |
| Undistributed net investment income | 18,777 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 143,608 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,043,958 | |
| Net Assets | $4,457,601 | |
| Fidelity Fund: | ||
| Net Asset Value, offering price and redemption price per share ($3,761,745 ÷ 89,485 shares) | $42.04 | |
| Class K: | ||
| Net Asset Value, offering price and redemption price per share ($695,856 ÷ 16,551 shares) | $42.04 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Amounts in thousands | Year ended June 30, 2016 | |
| Investment Income | ||
| Dividends | $66,733 | |
| Interest | 6 | |
| Income from Fidelity Central Funds | 512 | |
| Total income | 67,251 | |
| Expenses | ||
| Management fee | $15,955 | |
| Transfer agent fees | 6,358 | |
| Accounting and security lending fees | 1,070 | |
| Custodian fees and expenses | 67 | |
| Independent trustees' fees and expenses | 22 | |
| Registration fees | 81 | |
| Audit | 80 | |
| Legal | 20 | |
| Miscellaneous | 37 | |
| Total expenses before reductions | 23,690 | |
| Expense reductions | (187) | 23,503 |
| Net investment income (loss) | 43,748 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 186,966 | |
| Foreign currency transactions | (225) | |
| Futures contracts | (9,658) | |
| Total net realized gain (loss) | 177,083 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (275,034) | |
| Futures contracts | 2,198 | |
| Total change in net unrealized appreciation (depreciation) | (272,836) | |
| Net gain (loss) | (95,753) | |
| Net increase (decrease) in net assets resulting from operations | $(52,005) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended June 30, 2016 | Year ended June 30, 2015 |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $43,748 | $44,597 |
| Net realized gain (loss) | 177,083 | 715,624 |
| Change in net unrealized appreciation (depreciation) | (272,836) | (184,216) |
| Net increase (decrease) in net assets resulting from operations | (52,005) | 576,005 |
| Distributions to shareholders from net investment income | (36,756) | (39,297) |
| Distributions to shareholders from net realized gain | (224,972) | (600,919) |
| Total distributions | (261,728) | (640,216) |
| Share transactions - net increase (decrease) | (324,381) | (769,920) |
| Total increase (decrease) in net assets | (638,114) | (834,131) |
| Net Assets | ||
| Beginning of period | 5,095,715 | 5,929,846 |
| End of period | $4,457,601 | $5,095,715 |
| Other Information | ||
| Undistributed net investment income end of period | $18,777 | $17,253 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $44.69 | $45.42 | $39.77 | $34.51 | $34.35 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .38 | .34 | .35 | .44 | .37 |
| Net realized and unrealized gain (loss) | (.73) | 3.91 | 8.61 | 5.31 | .02 |
| Total from investment operations | (.35) | 4.25 | 8.96 | 5.75 | .39 |
| Distributions from net investment income | (.31) | (.30) | (.32) | (.49) | (.23) |
| Distributions from net realized gain | (1.99) | (4.68) | (2.98) | – | – |
| Total distributions | (2.30) | (4.98) | (3.31)B | (.49) | (.23) |
| Net asset value, end of period | $42.04 | $44.69 | $45.42 | $39.77 | $34.51 |
| Total ReturnC | (.83)% | 10.52% | 23.70% | 16.85% | 1.21% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .52% | .52% | .53% | .56% | .58% |
| Expenses net of fee waivers, if any | .52% | .52% | .53% | .56% | .58% |
| Expenses net of all reductions | .52% | .52% | .53% | .55% | .58% |
| Net investment income (loss) | .91% | .79% | .82% | 1.18% | 1.13% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $3,762 | $4,143 | $4,811 | $4,451 | $4,364 |
| Portfolio turnover rateF | 67% | 59%G | 93% | 113% | 102% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $3.31 per share is comprised of distributions from net investment income of $.324 and distributions from net realized gain of $2.984 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Fund Class K
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $44.69 | $45.42 | $39.78 | $34.52 | $34.35 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .42 | .39 | .40 | .49 | .42 |
| Net realized and unrealized gain (loss) | (.72) | 3.91 | 8.60 | 5.31 | .02 |
| Total from investment operations | (.30) | 4.30 | 9.00 | 5.80 | .44 |
| Distributions from net investment income | (.36) | (.35) | (.38) | (.54) | (.27) |
| Distributions from net realized gain | (1.99) | (4.68) | (2.98) | – | – |
| Total distributions | (2.35) | (5.03) | (3.36) | (.54) | (.27) |
| Net asset value, end of period | $42.04 | $44.69 | $45.42 | $39.78 | $34.52 |
| Total ReturnB | (.72)% | 10.65% | 23.83% | 17.03% | 1.37% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .41% | .41% | .41% | .42% | .43% |
| Expenses net of fee waivers, if any | .41% | .41% | .41% | .42% | .43% |
| Expenses net of all reductions | .41% | .41% | .41% | .41% | .42% |
| Net investment income (loss) | 1.02% | .90% | .94% | 1.32% | 1.29% |
| Supplemental Data | |||||
| Net assets, end of period (in millions) | $696 | $952 | $1,119 | $994 | $814 |
| Portfolio turnover rateE | 67% | 59%F | 93% | 113% | 102% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Fidelity Fund and Class K 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of June 30, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, passive foreign investment companies (PFIC), market discount, deferred trustees compensation, partnerships and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $1,068,544 |
| Gross unrealized depreciation | (24,511) |
| Net unrealized appreciation (depreciation) on securities | $1,044,033 |
| Tax Cost | $3,452,540 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $23,043 |
| Undistributed long-term capital gain | $143,559 |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,044,009 |
The tax character of distributions paid was as follows:
| June 30, 2016 | June 30, 2015 | |
| Ordinary Income | $38,221 | $ 128,905 |
| Long-term Capital Gains | 223,507 | 511,311 |
| Total | $261,728 | $ 640,216 |
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end. For the period, the average monthly underlying face amount at value for futures contracts in the aggregate was $60,628. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
During the period the Fund recognized net realized gain (loss) of $(9,658) and a change in net unrealized appreciation (depreciation) of $2,198 related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,085,772 and $3,589,195, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (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 .09% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .34% 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 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 Fidelity Fund. FIIOC receives an asset-based fee of Class K's average net assets. 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 | |
| Fidelity Fund | $5,951 | .15 |
| Class K | 407 | .05 |
| $6,358 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $60 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 $7 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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 $247. During the period, there were no securities loaned to FCM.
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 $149 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 $38.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Fidelity Fund | $28,914 | $31,557 |
| Class K | 7,842 | 7,740 |
| Total | $36,756 | $39,297 |
| From net realized gain | ||
| Fidelity Fund | $183,334 | $495,740 |
| Class K | 41,638 | 105,179 |
| Total | $224,972 | $600,919 |
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 | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Fidelity Fund | ||||
| Shares sold | 3,667 | 4,199 | $152,399 | $183,360 |
| Reinvestment of distributions | 4,583 | 11,899 | 196,417 | 494,064 |
| Shares redeemed | (11,490) | (29,307)(a) | (476,458) | (1,299,539)(a) |
| Net increase (decrease) | (3,240) | (13,209) | $(127,642) | $(622,115) |
| Class K | ||||
| Shares sold | 7,320 | 3,436 | $293,997 | $150,591 |
| Reinvestment of distributions | 1,156 | 2,722 | 49,480 | 112,919 |
| Shares redeemed | (13,234) | (9,474) | (540,216) | (411,315) |
| Net increase (decrease) | (4,758) | (3,316) | $(196,739) | $(147,805) |
(a) Amount includes in-kind redemptions.
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Melissa M. Reilly (1971)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Ms. Reilly also serves as Vice President of other funds. Ms. Reilly is an employee of Fidelity Investments (2004-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
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 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 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.
| Annualized Expense Ratio-A | Beginning Account Value January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Fidelity Fund | .52% | |||
| Actual | $1,000.00 | $1,000.70 | $2.59 | |
| Hypothetical-C | $1,000.00 | $1,022.28 | $2.61 | |
| Class K | .42% | |||
| Actual | $1,000.00 | $1,001.20 | $2.09 | |
| Hypothetical-C | $1,000.00 | $1,022.77 | $2.11 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains | |
| Fidelity Fund | 8/15/2016 | 8/12/2016 | $0.220 | $1.383 |
| Class K | 8/15/2016 | 8/12/2016 | $0.242 | $1.383 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended June 30, 2016, $179,049,671 or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Fund and Class K designates 100% of the dividends distributed in August and December 2015 during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Fidelity Fund and Class K designates 100% of the dividends distributed in August and December 2015 during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
FID-ANN-0816
1.705632.119
Fidelity® Series Growth & Income Fund Fidelity® Series Growth & Income Fund Annual Report June 30, 2016 |
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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, or for Class F, call 1-800-835-5092, 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. © 2016 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended June 30, 2016 | Past 1 year | Life of fundA |
| Fidelity® Series Growth & Income Fund | (2.56)% | 10.94% |
| Class F | (2.40)% | 11.12% |
A From December 6, 2012
Prior to August 1, 2013, the fund was named Fidelity® Series Mega Cap Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity® Series Growth & Income Fund, a class of the fund, on December 6, 2012, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $14,482 | Fidelity® Series Growth & Income Fund | |
| $16,005 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: It was a choppy 12 months for U.S. equities through June 30, 2016, with macro factors – notably the uncertain direction of monetary policy, energy markets, China’s economy and the U.K.'s relationship with the European Union– dominating investor sentiment. The S&P 500® index rose 3.99% for the year. Stocks suffered a steep, late-summer decline on concern about slowing growth in China. A sharp recovery in October was fueled by the U.S. Federal Reserve’s decision to delay raising near-term interest rates, as well as a rate cut in China and economic stimulus in Europe. But continued oil-price weakness and U.S.-dollar strength pushed the S&P 500® to its worst January since 2009. Mid-February through the period’s final week saw steady increases driven by U.S. jobs gains, a broad rally in commodities and perceived softening in the Fed’s rate-tightening posture. However, the U.K.’s late-June vote in favor of exiting the EU resulted in a sharp two-day decline for markets globally, followed by a rebound as investor sentiment shifted to end the month. Smaller-caps lagged, with the Russell 2000® Index returning -6.73%. The tech-heavy Nasdaq Composite Index® returned -1.68%, as major constituent Apple (-22%) struggled. Sector performance varied widely within the S&P 500®, as demand for more-stable, higher-yielding investments boosted traditionally defensive, dividend-rich groups, while resources-dependent stocks foundered.Comments from Portfolio Manager Matthew Fruhan: For the year, the fund’s share classes generated low-single-digit declines, trailing the 3.99% gain of the benchmark S&P 500® index. Versus the benchmark, the fund was hurt most by weak stock selection in the financials sector. We were overweight various financial institutions that struggled as interest rates fell, which makes their lending less profitable. Notable relative detractors from this sector included Bank of America, State Street, Citigroup, JPMorgan Chase and Morgan Stanley, along with KKR, an alternative asset manager and non-benchmark stock that faced business challenges amid volatile financial markets. The fund’s biggest individual detractor was not holding benchmark component and online retailer Amazon.com, whose shares were up 65% this period. Amazon continued to strike me as a good business but not a good investment at its lofty valuation. On the positive side, security selection in health care contributed, especially largely avoiding biotechnology company Gilead Sciences and not owning pharmaceuticals company Allergan, two poor-performing benchmark components that did not meet my criteria. Conversely, the fund’s top individual contributor was General Electric, which continued to divest its financial services businesses and return to its roots as an industrial company.The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| JPMorgan Chase & Co. | 3.6 | 4.2 |
| General Electric Co.(a) | 3.3 | 3.8 |
| Microsoft Corp. | 3.1 | 3.3 |
| Bank of America Corp. | 2.6 | 2.9 |
| Apple, Inc. | 2.6 | 3.1 |
| Chevron Corp.(a) | 2.5 | 2.2 |
| Johnson & Johnson(a) | 2.4 | 2.1 |
| Procter & Gamble Co.(a) | 2.4 | 2.2 |
| Citigroup, Inc. | 2.3 | 2.6�� |
| Qualcomm, Inc. | 1.9 | 1.9 |
| 26.7 |
(a) Security or a portion of the security is pledged as collateral for call options written.
Top Five Market Sectors as of June 30, 2016
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Financials | 20.5 | 22.2 |
| Information Technology | 19.9 | 21.1 |
| Health Care | 14.1 | 12.3 |
| Industrials | 12.6 | 13.0 |
| Energy | 12.5 | 9.6 |
Asset Allocation (% of fund's net assets)
| As of June 30, 2016*,** | ||
| Stocks | 97.9% | |
| Convertible Securities | 1.5% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.6% | |
* Foreign investments - 11.5%
** Written Options - (0.1)%
| As of December 31, 2015*,** | ||
| Stocks | 98.4% | |
| Convertible Securities | 1.1% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.5% | |
* Foreign investments - 11.8%
** Written Options - 0.0%
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments June 30, 2016
Showing Percentage of Net Assets
| Common Stocks - 97.9% | |||
| Shares | Value | ||
| CONSUMER DISCRETIONARY - 8.4% | |||
| Auto Components - 0.3% | |||
| BorgWarner, Inc. | 499,500 | $14,745,240 | |
| Johnson Controls, Inc. | 210,900 | 9,334,434 | |
| 24,079,674 | |||
| Automobiles - 0.2% | |||
| General Motors Co. | 385,300 | 10,903,990 | |
| Harley-Davidson, Inc. | 113,100 | 5,123,430 | |
| 16,027,420 | |||
| Diversified Consumer Services - 0.0% | |||
| H&R Block, Inc. | 148,800 | 3,422,400 | |
| Hotels, Restaurants & Leisure - 0.7% | |||
| Cedar Fair LP (depositary unit) | 23,300 | 1,347,206 | |
| Dunkin' Brands Group, Inc. | 258,700 | 11,284,494 | |
| Las Vegas Sands Corp. | 293,900 | 12,781,711 | |
| Whitbread PLC | 126,935 | 5,939,196 | |
| Wingstop, Inc. | 32,000 | 872,000 | |
| Yum! Brands, Inc. (a) | 386,855 | 32,078,017 | |
| 64,302,624 | |||
| Leisure Products - 0.1% | |||
| NJOY, Inc. (b)(c) | 791,469 | 31,896 | |
| Polaris Industries, Inc. | 136,400 | 11,152,064 | |
| 11,183,960 | |||
| Media - 4.3% | |||
| Comcast Corp. Class A (a) | 2,407,700 | 156,957,963 | |
| Scripps Networks Interactive, Inc. Class A | 756,014 | 47,076,992 | |
| Sinclair Broadcast Group, Inc. Class A | 467,523 | 13,960,237 | |
| Time Warner, Inc. | 1,500,477 | 110,345,079 | |
| Viacom, Inc. Class B (non-vtg.) | 1,125,800 | 46,686,926 | |
| 375,027,197 | |||
| Multiline Retail - 1.4% | |||
| Target Corp. (a) | 1,696,675 | 118,461,849 | |
| Specialty Retail - 1.3% | |||
| Foot Locker, Inc. | 171,700 | 9,419,462 | |
| L Brands, Inc. | 171,600 | 11,519,508 | |
| Lowe's Companies, Inc. | 1,160,900 | 91,908,453 | |
| 112,847,423 | |||
| Textiles, Apparel & Luxury Goods - 0.1% | |||
| Ralph Lauren Corp. | 115,900 | 10,386,958 | |
| TOTAL CONSUMER DISCRETIONARY | 735,739,505 | ||
| CONSUMER STAPLES - 6.9% | |||
| Beverages - 2.2% | |||
| Britvic PLC | 243,400 | 1,904,663 | |
| Diageo PLC | 1,341,951 | 37,488,291 | |
| PepsiCo, Inc. | 253,100 | 26,813,414 | |
| The Coca-Cola Co. (a) | 2,720,018 | 123,298,416 | |
| 189,504,784 | |||
| Food & Staples Retailing - 1.1% | |||
| CVS Health Corp. | 719,000 | 68,837,060 | |
| Walgreens Boots Alliance, Inc. | 311,593 | 25,946,349 | |
| 94,783,409 | |||
| Food Products - 0.2% | |||
| Mead Johnson Nutrition Co. Class A | 231,200 | 20,981,400 | |
| Household Products - 2.4% | |||
| Procter & Gamble Co. (a) | 2,427,300 | 205,519,491 | |
| Personal Products - 0.1% | |||
| Edgewell Personal Care Co. (b) | 140,200 | 11,834,282 | |
| Tobacco - 0.9% | |||
| British American Tobacco PLC sponsored ADR | 136,359 | 17,655,763 | |
| Imperial Tobacco Group PLC | 163,438 | 8,863,697 | |
| Philip Morris International, Inc. | 484,166 | 49,249,366 | |
| 75,768,826 | |||
| TOTAL CONSUMER STAPLES | 598,392,192 | ||
| ENERGY - 12.4% | |||
| Energy Equipment & Services - 1.3% | |||
| Baker Hughes, Inc. | 447,700 | 20,204,701 | |
| Helmerich & Payne, Inc. | 171,200 | 11,492,656 | |
| National Oilwell Varco, Inc. | 822,900 | 27,690,585 | |
| Oceaneering International, Inc. | 900,530 | 26,889,826 | |
| Schlumberger Ltd. | 301,207 | 23,819,450 | |
| 110,097,218 | |||
| Oil, Gas & Consumable Fuels - 11.1% | |||
| Amyris, Inc. (b)(d) | 228,433 | 102,909 | |
| Anadarko Petroleum Corp. | 173,700 | 9,249,525 | |
| Apache Corp. | 1,162,441 | 64,713,090 | |
| Cabot Oil & Gas Corp. | 307,900 | 7,925,346 | |
| Cenovus Energy, Inc. | 3,563,700 | 49,292,402 | |
| Chevron Corp. (a) | 2,076,535 | 217,683,164 | |
| ConocoPhillips Co. | 2,075,680 | 90,499,648 | |
| Energy Transfer Equity LP | 576,400 | 8,282,868 | |
| EQT Midstream Partners LP | 72,000 | 5,781,600 | |
| Golar LNG Ltd. | 718,300 | 11,133,650 | |
| Imperial Oil Ltd. | 2,068,600 | 65,454,830 | |
| Kinder Morgan, Inc. | 4,015,800 | 75,175,776 | |
| Legacy Reserves LP | 1,368,375 | 2,216,768 | |
| MPLX LP | 232,139 | 7,806,835 | |
| PrairieSky Royalty Ltd. | 967,315 | 18,358,732 | |
| Suncor Energy, Inc. | 4,998,800 | 138,671,769 | |
| Teekay LNG Partners LP | 692,700 | 7,792,875 | |
| The Williams Companies, Inc. | 4,267,557 | 92,307,258 | |
| Williams Partners LP | 2,792,491 | 96,731,888 | |
| 969,180,933 | |||
| TOTAL ENERGY | 1,079,278,151 | ||
| FINANCIALS - 20.5% | |||
| Banks - 13.7% | |||
| Bank of America Corp. | 17,059,205 | 226,375,650 | |
| Citigroup, Inc. | 4,727,783 | 200,410,721 | |
| Citizens Financial Group, Inc. | 87,300 | 1,744,254 | |
| Comerica, Inc. | 995,100 | 40,928,463 | |
| Cullen/Frost Bankers, Inc. | 111,700 | 7,118,641 | |
| Fifth Third Bancorp | 596,100 | 10,485,399 | |
| JPMorgan Chase & Co. | 4,997,354 | 310,535,574 | |
| Lloyds Banking Group PLC | 2,368,200 | 1,715,266 | |
| M&T Bank Corp. | 361,600 | 42,751,968 | |
| PNC Financial Services Group, Inc. | 487,724 | 39,695,856 | |
| Regions Financial Corp. | 6,429,150 | 54,712,067 | |
| Standard Chartered PLC (United Kingdom) | 1,887,310 | 14,318,977 | |
| SunTrust Banks, Inc. | 2,507,000 | 102,987,560 | |
| U.S. Bancorp | 2,567,639 | 103,552,881 | |
| Wells Fargo & Co. | 824,299 | 39,014,072 | |
| 1,196,347,349 | |||
| Capital Markets - 4.8% | |||
| Apollo Global Management LLC Class A | 870,300 | 13,185,045 | |
| Ashmore Group PLC | 1,616,800 | 6,437,570 | |
| Charles Schwab Corp. | 1,526,181 | 38,627,641 | |
| Franklin Resources, Inc. | 123,700 | 4,127,869 | |
| Goldman Sachs Group, Inc. | 30,600 | 4,546,548 | |
| Invesco Ltd. | 629,600 | 16,079,984 | |
| KKR & Co. LP | 3,245,362 | 40,047,767 | |
| Morgan Stanley | 2,056,800 | 53,435,664 | |
| Northern Trust Corp. | 1,311,751 | 86,916,621 | |
| Oaktree Capital Group LLC Class A | 341,100 | 15,267,636 | |
| State Street Corp. | 2,001,751 | 107,934,414 | |
| The Blackstone Group LP | 1,363,900 | 33,470,106 | |
| 420,076,865 | |||
| Diversified Financial Services - 0.4% | |||
| FactSet Research Systems, Inc. | 25,800 | 4,164,636 | |
| S&P Global, Inc. | 258,700 | 27,748,162 | |
| 31,912,798 | |||
| Insurance - 0.9% | |||
| Chubb Ltd. | 9,200 | 1,202,532 | |
| Marsh & McLennan Companies, Inc. | 530,007 | 36,284,279 | |
| MetLife, Inc. | 551,887 | 21,981,659 | |
| Principal Financial Group, Inc. | 363,300 | 14,935,263 | |
| 74,403,733 | |||
| Real Estate Investment Trusts - 0.5% | |||
| American Tower Corp. | 108,700 | 12,349,407 | |
| Crown Castle International Corp. | 227,200 | 23,044,896 | |
| First Potomac Realty Trust | 78,131 | 718,805 | |
| Sabra Health Care REIT, Inc. | 283,700 | 5,854,150 | |
| 41,967,258 | |||
| Thrifts & Mortgage Finance - 0.2% | |||
| MGIC Investment Corp. (b) | 689,400 | 4,101,930 | |
| Radian Group, Inc. | 1,490,064 | 15,526,467 | |
| 19,628,397 | |||
| TOTAL FINANCIALS | 1,784,336,400 | ||
| HEALTH CARE - 13.1% | |||
| Biotechnology - 2.8% | |||
| AbbVie, Inc. | 916,800 | 56,759,088 | |
| Amgen, Inc. | 455,219 | 69,261,571 | |
| Biogen, Inc. (b) | 209,900 | 50,758,018 | |
| Celgene Corp. (b) | 180,300 | 17,782,989 | |
| Gilead Sciences, Inc. | 154,700 | 12,905,074 | |
| Intercept Pharmaceuticals, Inc. (b) | 48,600 | 6,934,248 | |
| Shire PLC sponsored ADR | 162,400 | 29,894,592 | |
| 244,295,580 | |||
| Health Care Equipment & Supplies - 2.4% | |||
| Abbott Laboratories | 1,056,749 | 41,540,803 | |
| Ansell Ltd. | 650,959 | 8,909,055 | |
| Becton, Dickinson & Co. | 37,200 | 6,308,748 | |
| Medtronic PLC | 1,226,536 | 106,426,529 | |
| Zimmer Biomet Holdings, Inc. | 377,200 | 45,407,336 | |
| 208,592,471 | |||
| Health Care Providers & Services - 1.3% | |||
| Cigna Corp. | 125,300 | 16,037,147 | |
| McKesson Corp. | 433,047 | 80,828,223 | |
| Patterson Companies, Inc. | 443,460 | 21,237,299 | |
| 118,102,669 | |||
| Life Sciences Tools & Services - 0.4% | |||
| Agilent Technologies, Inc. | 856,800 | 38,007,648 | |
| Pharmaceuticals - 6.2% | |||
| Bayer AG | 15,500 | 1,556,741 | |
| Bristol-Myers Squibb Co. | 294,700 | 21,675,185 | |
| GlaxoSmithKline PLC sponsored ADR | 3,659,100 | 158,585,394 | |
| Innoviva, Inc. (d) | 399,500 | 4,206,735 | |
| Johnson & Johnson (a) | 1,741,070 | 211,191,791 | |
| Novartis AG sponsored ADR | 38,630 | 3,187,361 | |
| Sanofi SA | 360,152 | 29,922,412 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 2,140,084 | 107,496,419 | |
| 537,822,038 | |||
| TOTAL HEALTH CARE | 1,146,820,406 | ||
| INDUSTRIALS - 12.4% | |||
| Aerospace & Defense - 2.1% | |||
| General Dynamics Corp. | 31,700 | 4,413,908 | |
| Meggitt PLC | 352,473 | 1,915,846 | |
| Rolls-Royce Group PLC | 1,538,200 | 14,682,075 | |
| The Boeing Co. | 755,341 | 98,096,136 | |
| United Technologies Corp. | 639,400 | 65,570,470 | |
| 184,678,435 | |||
| Air Freight & Logistics - 2.2% | |||
| C.H. Robinson Worldwide, Inc. | 371,000 | 27,546,750 | |
| PostNL NV (b) | 5,888,242 | 24,019,721 | |
| United Parcel Service, Inc. Class B (a) | 1,266,245 | 136,399,911 | |
| 187,966,382 | |||
| Airlines - 0.2% | |||
| Copa Holdings SA Class A | 330,438 | 17,268,690 | |
| Building Products - 0.1% | |||
| Lennox International, Inc. | 31,200 | 4,449,120 | |
| Commercial Services & Supplies - 0.1% | |||
| KAR Auction Services, Inc. | 251,300 | 10,489,262 | |
| Electrical Equipment - 0.9% | |||
| AMETEK, Inc. | 93,300 | 4,313,259 | |
| Eaton Corp. PLC | 149,400 | 8,923,662 | |
| Emerson Electric Co. | 709,900 | 37,028,384 | |
| Hubbell, Inc. Class B | 280,503 | 29,584,651 | |
| 79,849,956 | |||
| Industrial Conglomerates - 3.3% | |||
| General Electric Co. (a) | 9,163,156 | 288,456,151 | |
| Machinery - 0.7% | |||
| Caterpillar, Inc. | 29,200 | 2,213,652 | |
| CLARCOR, Inc. | 34,500 | 2,098,635 | |
| Deere & Co. | 311,700 | 25,260,168 | |
| Donaldson Co., Inc. | 384,400 | 13,207,984 | |
| IMI PLC | 113,200 | 1,466,993 | |
| Pentair PLC | 45,900 | 2,675,511 | |
| Wabtec Corp. | 118,300 | 8,308,209 | |
| Xylem, Inc. | 181,700 | 8,112,905 | |
| 63,344,057 | |||
| Professional Services - 0.1% | |||
| Nielsen Holdings PLC | 137,400 | 7,140,678 | |
| Road & Rail - 2.2% | |||
| CSX Corp. | 2,466,108 | 64,316,097 | |
| J.B. Hunt Transport Services, Inc. | 722,188 | 58,446,675 | |
| Kansas City Southern | 272,600 | 24,558,534 | |
| Norfolk Southern Corp. | 264,434 | 22,511,266 | |
| Union Pacific Corp. | 219,600 | 19,160,100 | |
| 188,992,672 | |||
| Trading Companies & Distributors - 0.5% | |||
| MSC Industrial Direct Co., Inc. Class A | 96,100 | 6,780,816 | |
| W.W. Grainger, Inc. | 23,800 | 5,408,550 | |
| Watsco, Inc. | 238,847 | 33,603,384 | |
| 45,792,750 | |||
| TOTAL INDUSTRIALS | 1,078,428,153 | ||
| INFORMATION TECHNOLOGY - 19.8% | |||
| Communications Equipment - 1.6% | |||
| Cisco Systems, Inc. | 4,980,033 | 142,877,147 | |
| Internet Software & Services - 2.9% | |||
| Alphabet, Inc.: | |||
| Class A | 192,609 | 135,506,210 | |
| Class C (b) | 166,665 | 115,348,847 | |
| 250,855,057 | |||
| IT Services - 5.1% | |||
| First Data Corp. (e) | 1,987,987 | 22,007,016 | |
| First Data Corp. Class A (b) | 348,500 | 3,857,895 | |
| IBM Corp. | 609,194 | 92,463,465 | |
| MasterCard, Inc. Class A | 939,000 | 82,688,340 | |
| Paychex, Inc. (a) | 1,790,341 | 106,525,290 | |
| Sabre Corp. | 233,900 | 6,266,181 | |
| Unisys Corp. (b) | 1,364,300 | 9,932,104 | |
| Visa, Inc. Class A | 1,650,700 | 122,432,419 | |
| 446,172,710 | |||
| Semiconductors & Semiconductor Equipment - 2.4% | |||
| Maxim Integrated Products, Inc. | 740,500 | 26,428,445 | |
| Qualcomm, Inc. | 3,180,900 | 170,400,813 | |
| Xilinx, Inc. | 348,400 | 16,071,692 | |
| 212,900,950 | |||
| Software - 3.6% | |||
| Microsoft Corp. | 5,249,617 | 268,622,902 | |
| Oracle Corp. | 756,169 | 30,949,997 | |
| SS&C Technologies Holdings, Inc. | 338,300 | 9,499,464 | |
| 309,072,363 | |||
| Technology Hardware, Storage & Peripherals - 4.2% | |||
| Apple, Inc. | 2,337,960 | 223,508,976 | |
| EMC Corp. | 3,513,700 | 95,467,229 | |
| Western Digital Corp. | 931,300 | 44,013,238 | |
| 362,989,443 | |||
| TOTAL INFORMATION TECHNOLOGY | 1,724,867,670 | ||
| MATERIALS - 2.7% | |||
| Chemicals - 2.2% | |||
| CF Industries Holdings, Inc. | 527,100 | 12,703,110 | |
| E.I. du Pont de Nemours & Co. | 423,331 | 27,431,849 | |
| Johnson Matthey PLC | 24,100 | 903,924 | |
| LyondellBasell Industries NV Class A | 258,400 | 19,230,128 | |
| Monsanto Co. | 985,821 | 101,943,750 | |
| Potash Corp. of Saskatchewan, Inc. | 2,114,000 | 34,362,011 | |
| 196,574,772 | |||
| Containers & Packaging - 0.5% | |||
| Ball Corp. | 91,700 | 6,628,993 | |
| International Paper Co. | 37,400 | 1,585,012 | |
| Packaging Corp. of America | 94,400 | 6,318,192 | |
| WestRock Co. | 664,100 | 25,813,567 | |
| 40,345,764 | |||
| TOTAL MATERIALS | 236,920,536 | ||
| TELECOMMUNICATION SERVICES - 0.9% | |||
| Diversified Telecommunication Services - 0.9% | |||
| Verizon Communications, Inc. | 1,435,123 | 80,137,268 | |
| UTILITIES - 0.8% | |||
| Electric Utilities - 0.8% | |||
| Exelon Corp. | 2,049,700 | 74,527,092 | |
| PPL Corp. | 11,300 | 426,575 | |
| 74,953,667 | |||
| Multi-Utilities - 0.0% | |||
| Sempra Energy | 700 | 79,814 | |
| TOTAL UTILITIES | 75,033,481 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $7,903,343,768) | 8,539,953,762 | ||
| Preferred Stocks - 1.2% | |||
| Convertible Preferred Stocks - 1.2% | |||
| HEALTH CARE - 1.0% | |||
| Health Care Equipment & Supplies - 1.0% | |||
| Alere, Inc. 3.00% | 248,909 | 82,948,924 | |
| INDUSTRIALS - 0.2% | |||
| Commercial Services & Supplies - 0.2% | |||
| Stericycle, Inc. 2.25% | 191,900 | 15,962,242 | |
| UTILITIES - 0.0% | |||
| Independent Power and Renewable Electricity Producers - 0.0% | |||
| Dynegy, Inc. 7.00% (b) | 39,300 | 4,233,396 | |
| TOTAL CONVERTIBLE PREFERRED STOCKS | 103,144,562 | ||
| Nonconvertible Preferred Stocks - 0.0% | |||
| INDUSTRIALS - 0.0% | |||
| Aerospace & Defense - 0.0% | |||
| Rolls-Royce Group PLC | 103,603,200 | 137,922 | |
| Rolls-Royce Group PLC (C Shares) (b) | 46,164,600 | 61,457 | |
| 199,379 | |||
| TOTAL PREFERRED STOCKS | |||
| (Cost $96,271,689) | 103,343,941 | ||
| Principal Amount | Value | ||
| Convertible Bonds - 0.3% | |||
| CONSUMER DISCRETIONARY - 0.1% | |||
| Automobiles - 0.1% | |||
| Tesla Motors, Inc. 1.25% 3/1/21 | 8,100,000 | 6,657,188 | |
| ENERGY - 0.1% | |||
| Oil, Gas & Consumable Fuels - 0.1% | |||
| Amyris, Inc.: | |||
| 5% 10/15/18 (c) | 2,663,133 | 2,346,167 | |
| 9.5% 4/15/19 (e) | 5,081,000 | 2,400,773 | |
| Peabody Energy Corp. 4.75% 12/15/41 (f) | 13,140,000 | 65,700 | |
| 4,812,640 | |||
| INFORMATION TECHNOLOGY - 0.1% | |||
| Internet Software & Services - 0.1% | |||
| Twitter, Inc. 0.25% 9/15/19 | 12,910,000 | 11,828,788 | |
| TOTAL CONVERTIBLE BONDS | |||
| (Cost $37,625,318) | 23,298,616 | ||
| Shares | Value | ||
| Money Market Funds - 0.4% | |||
| Fidelity Cash Central Fund, 0.43% (g) | 32,549,773 | 32,549,773 | |
| Fidelity Securities Lending Cash Central Fund, 0.46% (g)(h) | 1,899,000 | 1,899,000 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $34,448,773) | 34,448,773 | ||
| TOTAL INVESTMENT PORTFOLIO - 99.8% | |||
| (Cost $8,071,689,548) | 8,701,045,092 | ||
| NET OTHER ASSETS (LIABILITIES) - 0.2% | 16,132,413 | ||
| NET ASSETS - 100% | $8,717,177,505 |
| Written Options | ||||
| Expiration Date/Exercise Price | Number of Contracts | Premium | Value | |
| Call Options | ||||
| Chevron Corp. | 9/16/16 - $110.00 | 3,123 | $302,924 | $(334,161) |
| Comcast Corp. Class A | 10/21/16 - $67.50 | 3,624 | 333,401 | (483,804) |
| General Electric Co. | 9/16/16 - $32.00 | 18,485 | 998,168 | (1,256,980) |
| Johnson & Johnson | 7/15/16 - $120.00 | 2,726 | 92,682 | (523,392) |
| Paychex, Inc. | 9/16/16 - $57.50 | 5,645 | 417,721 | (1,495,925) |
| Procter & Gamble Co. | 7/15/16 - $85.00 | 6,310 | 138,817 | (372,290) |
| Target Corp. | 7/15/16 - $87.50 | 3,072 | 452,803 | (3,072) |
| The Coca-Cola Co. | 7/15/16 - $48.00 | 2,884 | 46,143 | (4,326) |
| United Parcel Service, Inc. Class B | 10/21/16 - $105.00 | 1,857 | 790,570 | (900,645) |
| Yum! Brands, Inc. | 7/15/16 - $87.50 | 3,868 | 885,752 | (193,400) |
| TOTAL WRITTEN OPTIONS | $4,458,981 | $(5,567,995) |
Legend
(a) Security or a portion of the security is pledged as collateral for call options written. At period end, the value of securities pledged amounted to $321,233,881.
(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 $2,378,063 or 0.0% of net assets.
(d) Security or a portion of the security is on loan at period end.
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $24,407,789 or 0.3% of net assets.
(f) Non-income producing - Security is in default.
(g) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(h) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| Amyris, Inc. 5% 10/15/18 | 10/16/13 - 4/15/16 | $2,663,133 |
| NJOY, Inc. | 2/14/14 | $1,372,724 |
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 | $146,085 |
| Fidelity Securities Lending Cash Central Fund | 767,196 |
| Total | $913,281 |
Investment Valuation
The following is a summary of the inputs used, as of June 30, 2016, 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: | ||||
| Equities: | ||||
| Consumer Discretionary | $735,739,505 | $729,768,413 | $5,939,196 | $31,896 |
| Consumer Staples | 598,392,192 | 550,135,541 | 48,256,651 | -- |
| Energy | 1,079,278,151 | 1,079,278,151 | -- | -- |
| Financials | 1,784,336,400 | 1,761,864,587 | 22,471,813 | -- |
| Health Care | 1,229,769,330 | 1,106,432,198 | 123,337,132 | -- |
| Industrials | 1,094,589,774 | 1,052,505,139 | 42,084,635 | -- |
| Information Technology | 1,724,867,670 | 1,724,867,670 | -- | -- |
| Materials | 236,920,536 | 236,016,612 | 903,924 | -- |
| Telecommunication Services | 80,137,268 | 80,137,268 | -- | -- |
| Utilities | 79,266,877 | 79,266,877 | -- | -- |
| Corporate Bonds | 23,298,616 | -- | 23,298,616 | -- |
| Money Market Funds | 34,448,773 | 34,448,773 | -- | -- |
| Total Investments in Securities: | $8,701,045,092 | $8,434,721,229 | $266,291,967 | $31,896 |
| Derivative Instruments: | ||||
| Liabilities | ||||
| Written Options | $(5,567,995) | $(5,564,923) | $(3,072) | $-- |
| Total Liabilities | $(5,567,995) | $(5,564,923) | $(3,072) | $-- |
| Total Derivative Instruments: | $(5,567,995) | $(5,564,923) | $(3,072) | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended June 30, 2016. 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 | $225,414,335 |
| Level 2 to Level 1 | $0 |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2016. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value | |
| Asset | Liability | |
| Equity Risk | ||
| Written Options(a) | $0 | $(5,567,995) |
| Total Equity Risk | 0 | (5,567,995) |
| Total Value of Derivatives | $0 | $(5,567,995) |
(a) Gross value is presented in the Statement of Assets and Liabilities in the written options, at value line-item.
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 | 88.5% |
| Canada | 3.5% |
| United Kingdom | 3.3% |
| Ireland | 1.3% |
| Israel | 1.2% |
| Others (Individually Less Than 1%) | 2.2% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| June 30, 2016 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $1,763,028) — See accompanying schedule: Unaffiliated issuers (cost $8,037,240,775) | $8,666,596,319 | |
| Fidelity Central Funds (cost $34,448,773) | 34,448,773 | |
| Total Investments (cost $8,071,689,548) | $8,701,045,092 | |
| Foreign currency held at value (cost $1,051,216) | 1,051,216 | |
| Receivable for investments sold | 91,984,770 | |
| Receivable for fund shares sold | 272,172 | |
| Dividends receivable | 13,108,454 | |
| Interest receivable | 173,136 | |
| Distributions receivable from Fidelity Central Funds | 52,931 | |
| Other receivables | 62,216 | |
| Total assets | 8,807,749,987 | |
| Liabilities | ||
| Payable for investments purchased | $24,796,752 | |
| Payable for fund shares redeemed | 54,356,966 | |
| Accrued management fee | 3,310,660 | |
| Written options, at value (premium received $4,458,981) | 5,567,995 | |
| Other affiliated payables | 573,890 | |
| Other payables and accrued expenses | 67,219 | |
| Collateral on securities loaned, at value | 1,899,000 | |
| Total liabilities | 90,572,482 | |
| Net Assets | $8,717,177,505 | |
| Net Assets consist of: | ||
| Paid in capital | $8,173,905,834 | |
| Undistributed net investment income | 11,419,226 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (96,334,354) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 628,186,799 | |
| Net Assets | $8,717,177,505 | |
| Series Growth and Income: | ||
| Net Asset Value, offering price and redemption price per share ($3,411,837,440 ÷ 271,446,881 shares) | $12.57 | |
| Class F: | ||
| Net Asset Value, offering price and redemption price per share ($5,305,340,065 ÷ 421,364,821 shares) | $12.59 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended June 30, 2016 | ||
| Investment Income | ||
| Dividends | $222,483,870 | |
| Interest | 1,333,863 | |
| Income from Fidelity Central Funds | 913,281 | |
| Total income | 224,731,014 | |
| Expenses | ||
| Management fee | $40,087,594 | |
| Transfer agent fees | 5,800,281 | |
| Accounting and security lending fees | 1,257,584 | |
| Custodian fees and expenses | 189,138 | |
| Independent trustees' fees and expenses | 39,539 | |
| Audit | 59,952 | |
| Legal | 22,984 | |
| Interest | 9,605 | |
| Miscellaneous | 64,306 | |
| Total expenses before reductions | 47,530,983 | |
| Expense reductions | (281,207) | 47,249,776 |
| Net investment income (loss) | 177,481,238 | |
| Realized and Unrealized Gain (Loss) | ||
| Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | (18,162,233) | |
| Foreign currency transactions | (101,505) | |
| Written options | 6,742,599 | |
| Total net realized gain (loss) | (11,521,139) | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (380,157,094) | |
| Assets and liabilities in foreign currencies | (43,454) | |
| Written options | (1,109,014) | |
| Total change in net unrealized appreciation (depreciation) | (381,309,562) | |
| Net gain (loss) | (392,830,701) | |
| Net increase (decrease) in net assets resulting from operations | $(215,349,463) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $177,481,238 | $182,355,135 |
| Net realized gain (loss) | (11,521,139) | 342,736,689 |
| Change in net unrealized appreciation (depreciation) | (381,309,562) | (27,836,219) |
| Net increase (decrease) in net assets resulting from operations | (215,349,463) | 497,255,605 |
| Distributions to shareholders from net investment income | (193,648,252) | (172,781,038) |
| Distributions to shareholders from net realized gain | (338,147,916) | (249,011,603) |
| Total distributions | (531,796,168) | (421,792,641) |
| Share transactions - net increase (decrease) | 10,054,432 | 107,748,414 |
| Total increase (decrease) in net assets | (737,091,199) | 183,211,378 |
| Net Assets | ||
| Beginning of period | 9,454,268,704 | 9,271,057,326 |
| End of period | $8,717,177,505 | $9,454,268,704 |
| Other Information | ||
| Undistributed net investment income end of period | $11,419,226 | $40,722,733 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Series Growth & Income Fund
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | ||||
| Net asset value, beginning of period | $13.67 | $13.58 | $11.53 | $10.00 |
| Income from Investment Operations | ||||
| Net investment income (loss)B | .24 | .25 | .24 | .09 |
| Net realized and unrealized gain (loss) | (.59) | .43 | 2.29 | 1.45 |
| Total from investment operations | (.35) | .68 | 2.53 | 1.54 |
| Distributions from net investment income | (.26) | (.24) | (.21) | (.01) |
| Distributions from net realized gain | (.49) | (.36) | (.27) | – |
| Total distributions | (.75) | (.59)C | (.48) | (.01) |
| Net asset value, end of period | $12.57 | $13.67 | $13.58 | $11.53 |
| Total ReturnD,E | (2.56)% | 5.21% | 22.40% | 15.41% |
| Ratios to Average Net AssetsF,G | ||||
| Expenses before reductions | .63% | .63% | .66% | .78%H |
| Expenses net of fee waivers, if any | .63% | .63% | .66% | .78%H |
| Expenses net of all reductions | .63% | .63% | .66% | .77%H |
| Net investment income (loss) | 1.89% | 1.82% | 1.87% | 1.42%H |
| Supplemental Data | ||||
| Net assets, end of period (000 omitted) | $3,411,837 | $3,849,841 | $3,910,455 | $1,000,854 |
| Portfolio turnover rateI | 36% | 40% | 53%J | 80%H |
A For the period December 6, 2012 (commencement of operations) to June 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.59 per share is comprised of distributions from net investment income of $.235 and distributions from net realized gain of $.359 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. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Series Growth & Income Fund Class F
| Years ended June 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | ||||
| Net asset value, beginning of period | $13.69 | $13.60 | $11.54 | $10.00 |
| Income from Investment Operations | ||||
| Net investment income (loss)B | .26 | .27 | .26 | .10 |
| Net realized and unrealized gain (loss) | (.59) | .44 | 2.29 | 1.45 |
| Total from investment operations | (.33) | .71 | 2.55 | 1.55 |
| Distributions from net investment income | (.28) | (.26) | (.23) | (.01) |
| Distributions from net realized gain | (.49) | (.36) | (.27) | – |
| Total distributions | (.77) | (.62) | (.49)C | (.01) |
| Net asset value, end of period | $12.59 | $13.69 | $13.60 | $11.54 |
| Total ReturnD,E | (2.40)% | 5.37% | 22.61% | 15.53% |
| Ratios to Average Net AssetsF,G | ||||
| Expenses before reductions | .47% | .47% | .48% | .59%H |
| Expenses net of fee waivers, if any | .47% | .47% | .48% | .59%H |
| Expenses net of all reductions | .46% | .47% | .48% | .58%H |
| Net investment income (loss) | 2.05% | 1.98% | 2.04% | 1.60%H |
| Supplemental Data | ||||
| Net assets, end of period (000 omitted) | $5,305,340 | $5,604,428 | $5,360,603 | $1,227,712 |
| Portfolio turnover rateI | 36% | 40% | 53%J | 80%H |
A For the period December 6, 2012 (commencement of operations) to June 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.49 per share is comprised of distributions from net investment income of $.228 and distributions from net realized gain of $.266 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. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended June 30, 2016
1. Organization.
Fidelity Series Growth & Income Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the Trust) and is authorized to issue an unlimited number of shares. Shares of the Fund are only available for purchase by mutual funds for which Fidelity Management & Research Company (FMR) or an affiliate serves as an investment manager. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Series Growth & Income and Class F 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the FMR Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price and are generally 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 June 30, 2016, including information on transfers between Levels 1 and 2 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of June 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), market discount, partnerships, certain conversion ratio adjustments, equity-debt classifications and losses due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $1,226,213,847 |
| Gross unrealized depreciation | (652,023,704) |
| Net unrealized appreciation (depreciation) on securities | $574,190,143 |
| Tax Cost | $8,126,854,949 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $45,423,119 |
| Net unrealized appreciation (depreciation) on securities and other investments | $573,019,409 |
At period end, the Fund was required to defer approximately $181,701 of losses on options.The Fund intends to elect to defer to its next fiscal year $51,652,763 of capital losses recognized during the period November 1, 2015 to June 30, 2016.
The tax character of distributions paid was as follows:
| June 30, 2016 | June 30, 2015 | |
| Ordinary Income | $232,122,343 | $ 337,775,763 |
| Long-term Capital Gains | 299,673,825 | 84,016,878 |
| Total | $531,796,168 | $ 421,792,641 |
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. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including options. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded options may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Options. Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price between or on certain dates. Options obligate the seller (writer) to buy (put) or sell (call) an underlying instrument at the exercise or strike price or cash settle an underlying derivative instrument if the holder exercises the option on or before the expiration date.
The Fund used exchange-traded written covered call options to manage its exposure to the market. When the Fund writes a covered call option, the Fund holds the underlying instrument which must be delivered to the holder upon the exercise of the option.
Upon entering into a written options contract, the Fund will receive a premium. Premiums received are reflected as a liability on the Statement of Assets and Liabilities. Options are valued daily and any unrealized appreciation (depreciation) is reflected on the Statement of Assets and Liabilities. When a written option is exercised, the premium is added to the proceeds from the sale of the underlying instrument in determining the gain or loss realized on that investment. When an option is closed the Fund will realize a gain or loss depending on whether the proceeds or amount paid for the closing sale transaction are greater or less than the premium received. When an option expires, gains and losses are realized to the extent of premiums received. The net realized gain (loss) on closed and expired written options and the change in net unrealized appreciation (depreciation) on written options are reflected separately on the Statement of Operations.
Writing call options tends to decrease exposure to the underlying instrument and risk of loss is the change in value in excess of the premium received.
Any open options at period end are presented in the Schedule of Investments under the caption "Written Options".
During the period, the Fund recognized net realized gain (loss) of $6,742,599 and a change in net unrealized appreciation (depreciation) of $(1,109,014) related to its investment in written options. This amount is included in the Statement of Operations.
The following is a summary of the Fund's written options activity:
| Written Options | Number of Contracts | Amount of Premiums |
| Outstanding at beginning of period | - | $- |
| Options Opened | 188,938 | 12,857,574 |
| Options Exercised | (16,900) | (1,284,727) |
| Options Closed | (68,247) | (2,946,391) |
| Options Expired | (52,197) | (4,167,475) |
| Outstanding at end of period | 51,594 | $4,458,981 |
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,168,438,857 and $3,504,916,905, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company 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 .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .45% 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 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 Series Growth & Income. FIIOC receives no fees for providing transfer agency services to Class F. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each applicable class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Series Growth and Income | $5,800,281 | .16 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $66,284 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $37,627,650 | .46% | $9,605 |
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.
Other. During the period, the investment advisor reimbursed the Fund for certain losses in the amount of $79,529.
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 $13,841 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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 $767,196. During the period, there were no securities loaned to FCM.
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 $209,983 for the period. In addition, 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. During the period, these credits reduced the Fund's custody expenses by $628.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $70,596.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Year ended June 30, 2016 | Year ended June 30, 2015 | |
| From net investment income | ||
| Series Growth and Income | $74,235,384 | $67,539,753 |
| Class F | 119,412,868 | 105,241,285 |
| Total | $193,648,252 | $172,781,038 |
| From net realized gain | ||
| Series Growth and Income | $137,333,169 | $102,877,130 |
| Class F | 200,814,747 | 146,134,473 |
| Total | $338,147,916 | $249,011,603 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Shares | Dollars | Dollars | |
| Year ended June 30, 2016 | Year ended June 30, 2015 | Year ended June 30, 2016 | Year ended June 30, 2015 | |
| Series Growth and Income | ||||
| Shares sold | 28,151,373 | 23,010,887 | $346,630,621 | $311,637,225 |
| Reinvestment of distributions | 16,551,780 | 12,747,874 | 211,568,553 | 170,416,883 |
| Shares redeemed | (54,900,476) | (42,122,480) | (691,270,727) | (572,546,193) |
| Net increase (decrease) | (10,197,323) | (6,363,719) | $(133,071,553) | $(90,492,085) |
| Class F | ||||
| Shares sold | 74,341,299 | 60,319,132 | $921,192,271 | $817,713,355 |
| Reinvestment of distributions | 25,047,819 | 18,770,984 | 320,227,615 | 251,375,758 |
| Shares redeemed | (87,369,438) | (63,950,478) | (1,098,293,901) | (870,848,614) |
| Net increase (decrease) | 12,019,680 | 15,139,638 | $143,125,985 | $198,240,499 |
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.
At the end of the period, mutual funds managed by the investment adviser or its affiliates were the owners of record of all of the outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Hastings Street Trust and Shareholders of Fidelity Series Growth & Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Series Growth & Income Fund (a fund of Fidelity Hastings Street Trust) at June 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Series Growth & Income Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544 for Fidelity Series Growth & Income Fund or 1-800-835-5092 for Class F.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Mr. Goebel serves as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present). Previously, Mr. Goebel served as Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
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 (January 1, 2016 to June 30, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
| Annualized Expense Ratio-A | Beginning Account Value January 1, 2016 | Ending Account Value June 30, 2016 | Expenses Paid During Period-B January 1, 2016 to June 30, 2016 | |
| Series Growth and Income | .63% | |||
| Actual | $1,000.00 | $1,014.40 | $3.16 | |
| Hypothetical-C | $1,000.00 | $1,021.73 | $3.17 | |
| Class F | .47% | |||
| Actual | $1,000.00 | $1,014.70 | $2.35 | |
| Hypothetical-C | $1,000.00 | $1,022.53 | $2.36 |
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 182/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Series Growth & Income voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains | |
| Series Growth & Income | 8/15/2016 | 8/12/2016 | $0.000 | $0.018 |
| Class F | 8/15/2016 | 8/12/2016 | $0.000 | $0.018 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended June 30, 2016, $88,665,027 or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.02% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
Series Growth & Income designates 56%, 53%, 95%, 97% and 100%; and Class F designates 52%, 53%, 86%, 91% and 100%; of the dividends distributed in July, August, October, December and April, respectively during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Series Growth & Income designates 78%, 74%, 100%, 100% and 100%; and Class F designates 72%, 74%, 95%, 100% and 100%; of the dividends distributed in July, August, October, December and April, respectively during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
MHT-ANN-0816
1.951035.103
Item 2.
Code of Ethics
As of the end of the period, June 30, 2016, Fidelity Hastings Street Trust (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3.
Audit Committee Financial Expert
The Board of Trustees of the trust has determined that Joseph Mauriello is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Mauriello is independent for purposes of Item 3 of Form N-CSR.
Item 4.
Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by PricewaterhouseCoopers LLP (“PwC”) in each of the last two fiscal years for services rendered to Fidelity Advisor Series Growth & Income Fund, Fidelity Fund, Fidelity Growth Discovery Fund, Fidelity Mega Cap Stock Fund and Fidelity Series Growth & Income Fund (the “Funds”):
Services Billed by PwC
June 30, 2016 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Series Growth & Income Fund | $42,000 | $- | $6,600 | $1,900 |
Fidelity Fund | $68,000 | $- | $7,300 | $3,200 |
Fidelity Growth Discovery Fund | $46,000 | $- | $4,300 | $2,100 |
Fidelity Mega Cap Stock Fund | $48,000 | $- | $3,500 | $2,500 |
Fidelity Series Growth & Income Fund | $47,000 | $- | $8,000 | $3,400 |
June 30, 2015 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Series Growth & Income Fund | $40,000 | $- | $10,700 | $2,200 |
Fidelity Fund | $66,000 | $- | $4,100 | $3,700 |
Fidelity Growth Discovery Fund | $45,000 | $- | $4,300 | $2,200 |
Fidelity Mega Cap Stock Fund | $45,000 | $- | $5,800 | $3,000 |
Fidelity Series Growth & Income Fund | $50,000 | $- | $11,100 | $5,100 |
A Amounts may reflect rounding.
The following table presents fees billed by PwC that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Funds and that are rendered on behalf of Fidelity Management & Research Company (“FMR”) and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) that provide ongoing services to the Funds (“Fund Service Providers”):
Services Billed by PwC
| June 30, 2016A | June 30, 2015A |
Audit-Related Fees | $6,140,000 | $4,075,000 |
Tax Fees | $- | $- |
All Other Fees | $- | $- |
A Amounts may reflect rounding.
“Audit-Related Fees” represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
“Tax Fees” represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
“All Other Fees” represent fees billed for services provided to the fund or Fund Service Provider, a significant portion of which are assurance related, that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by PwC for services rendered to the Funds, FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Funds are as follows:
Billed By | June 30, 2016 A | June 30, 2015 A,B |
PwC | $6,905,000 | $5,400,000 |
A Amounts may reflect rounding.
B Reflects current period presentation.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by PwC to Fund Service Providers to be compatible with maintaining the independence of PwC in its audit of the Funds, taking into account representations from PwC, in accordance with Public Company Accounting Oversight
Board rules, regarding its independence from the Funds and their related entities and FMR’s review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by a fund’s independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund (“Covered Service”) are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair’s absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X (“De Minimis Exception”)
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Funds’ last two fiscal years relating to services provided to (i) the Funds or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Funds.
Item 5.
Audit Committee of Listed Registrants
Not applicable.
Item 6.
Investments
(a)
Not applicable.
(b)
Not applicable
Item 7.
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8.
Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9.
Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10.
Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the trust’s Board of Trustees.
Item 11.
Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the trust’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the trust’s internal control over financial reporting.
Item 12.
Exhibits
(a) | (1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) |
| Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Hastings Street Trust
By: | /s/Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
|
|
Date: | August 25, 2016 |
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: | August 25, 2016 |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
|
|
Date: | August 25, 2016 |