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 811-3221
Fidelity Charles Street Trust
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | September 30 |
Date of reporting period: | March 31, 2008 |
Item 1. Reports to Stockholders
Fidelity
Asset Manager® 20%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 974.10 | $ 4.24 |
HypotheticalA | $ 1,000.00 | $ 1,020.70 | $ 4.34 |
Class T | |||
Actual | $ 1,000.00 | $ 972.70 | $ 5.47 |
HypotheticalA | $ 1,000.00 | $ 1,019.45 | $ 5.60 |
Class B | |||
Actual | $ 1,000.00 | $ 970.40 | $ 8.23** |
HypotheticalA | $ 1,000.00 | $ 1,016.65 | $ 8.42** |
Class C | |||
Actual | $ 1,000.00 | $ 970.40 | $ 8.13 |
HypotheticalA | $ 1,000.00 | $ 1,016.75 | $ 8.32 |
Asset Manager 20% | |||
Actual | $ 1,000.00 | $ 975.50 | $ 2.77 |
HypotheticalA | $ 1,000.00 | $ 1,022.20 | $ 2.83 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 976.20 | $ 2.77 |
HypotheticalA | $ 1,000.00 | $ 1,022.20 | $ 2.83 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | .86% |
Class T | 1.11% |
Class B | 1.67%** |
Class C | 1.65% |
Asset Manager 20% | .56% |
Institutional Class | .56% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Shareholder Expense Example - continued
** If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratio and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized | Expenses | |
Class B | ||
Actual | 1.65% | $ 8.13 |
HypotheticalA | $ 8.32 |
A 5% return per year before expenses
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
Fannie Mae | 16.4 | 13.5 |
Freddie Mac | 5.8 | 5.0 |
U.S. Treasury Obligations | 5.4 | 6.2 |
Government National Mortgage Association | 1.9 | 0.9 |
Wells Fargo Mortgage Backed Securities Trust | 0.6 | 0.6 |
30.1 | ||
Quality Diversification (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
 | U.S. Government and U.S. Government |  | U.S. Government and U.S. Government | ||||
 | AAA,AA,A 12.9% |  | AAA,AA,A 16.7% | ||||
 | BBB 9.5% |  | BBB 9.3% | ||||
 | BB and Below 4.6% |  | BB and Below 4.4% | ||||
 | Not Rated 0.4% |  | Not Rated 0.8% | ||||
 | Equities 20.2% |  | Equities 20.5% | ||||
 | Short-Term |  | Short-Term | ||||
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent down-grades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.3 | 0.3 |
Procter & Gamble Co. | 0.3 | 0.3 |
Nintendo Co. Ltd. | 0.2 | 0.0 |
General Electric Co. | 0.2 | 0.3 |
JPMorgan Chase & Co. | 0.2 | 0.2 |
1.2 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
 | Bond class 57.1% | | Bond class 60.7% | ||||
| Short-Term class 22.8% |  | Short-Term class 18.7% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 3.1 |
Fidelity Information Technology Central Fund | 2.7 |
Fidelity Energy Central Fund | 2.3 |
Fidelity Industrials Central Fund | 2.3 |
Fidelity Health Care Central Fund | 2.1 |
Fidelity Consumer Discretionary Central Fund | 1.8 |
Fidelity Consumer Staples Central Fund | 1.8 |
Fidelity Materials Central Fund | 0.8 |
Fidelity Utilities Central Fund | 0.7 |
Fidelity Telecom Services Central Fund | 0.6 |
Total Equity Central Funds | 18.2 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 48.1 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 52.1 |
Money Market Central Funds | 26.1 |
Other Short-Term Investments and Net Other Assets | 3.6 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 7.4% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 18.2% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 447,565 | $ 45,343 | ||
Fidelity Consumer Staples Central Fund (c) | 353,178 | 44,797 | ||
Fidelity Energy Central Fund (c) | 402,299 | 57,963 | ||
Fidelity Financials Central Fund (c) | 912,062 | 76,066 | ||
Fidelity Health Care Central Fund (c) | 510,652 | 52,291 | ||
Fidelity Industrials Central Fund (c) | 462,586 | 57,139 | ||
Fidelity Information Technology Central Fund (c) | 583,392 | 67,883 | ||
Fidelity Materials Central Fund (c) | 133,437 | 18,831 | ||
Fidelity Telecom Services Central Fund (c) | 124,126 | 13,423 | ||
Fidelity Utilities Central Fund (c) | 153,983 | 17,725 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $419,280) | 451,461 | |||
Fixed-Income Central Funds - 52.1% | ||||
Investment Grade Fixed-Income Funds - 48.1% | ||||
Fidelity Tactical Income Central Fund (c) | 12,587,709 | 1,193,567 | ||
High Yield Fixed-Income Funds - 4.0% | ||||
Fidelity Floating Rate Central Fund (c) | 628,271 | 55,834 | ||
Fidelity High Income Central Fund 1 (c) | 481,858 | 44,712 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 100,546 | |||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $1,338,809) | 1,294,113 | |||
Money Market Central Funds - 26.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 511,762,184 | 511,762 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 135,550,134 | 135,550 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $647,312) | 647,312 | |||
U.S. Treasury Obligations - 0.1% | ||||
Principal Amount (000s) | ||||
U.S. Treasury Bills, yield at date of purchase 1.4% to 3.09% 4/10/08 to 6/5/08 (b) | $ 3,500 | 3,493 | ||
Cash Equivalents - 3.4% | ||||
Maturity Amount (000s) | Value (000s) | |||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 83,876 | $ 83,873 | ||
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $2,492,765) | 2,480,252 | |||
NET OTHER ASSETS - 0.1% | 1,290 | |||
NET ASSETS - 100% | $ 2,481,542 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
911 S&P 500 E-Mini Index Contracts | June 2008 | $ 60,308 | $ 1,421 | ||
The face value of futures purchased as a percentage of net assets - 2.4% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $3,493,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement/Counterparty | Value |
$83,873,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 57,403 |
Barclays Capital, Inc. | 195 |
Lehman Brothers, Inc. | 26,275 |
$ 83,873 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 10,613 |
Fidelity Consumer Discretionary Central Fund | 356 |
Fidelity Consumer Staples Central Fund | 402 |
Fidelity Energy Central Fund | 209 |
Fidelity Financials Central Fund | 1,162 |
Fidelity Floating Rate Central Fund | 2,273 |
Fidelity Health Care Central Fund | 278 |
Fidelity High Income Central Fund 1 | 1,689 |
Fidelity Industrials Central Fund | 416 |
Fidelity Information Technology Central Fund | 258 |
Fidelity Materials Central Fund | 193 |
Fidelity Money Market Central Fund | 3,253 |
Fidelity Tactical Income Central Fund | 31,270 |
Fidelity Telecom Services Central Fund | 148 |
Fidelity Utilities Central Fund | 190 |
Total | $ 52,710 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary | $ 48,742 | $ 4,855 | $ - | $ 45,343 | 7.5% |
Fidelity Consumer Staples Central Fund | 39,907 | 4,598 | - | 44,797 | 7.5% |
Fidelity Energy | 50,544 | 5,837 | - | 57,963 | 7.5% |
Fidelity Financials Central Fund | 90,663 | 8,491 | - | 76,066 | 7.5% |
Fidelity Floating Rate Central Fund | 61,332 | - | - | 55,834 | 2.3% |
Fidelity Health Care Central Fund | 54,673 | 6,379 | - | 52,291 | 7.5% |
Fidelity High Income Central Fund 1 | 39,618 | 7,498 | - | 44,712 | 17.2% |
Fidelity Industrials Central Fund | 55,944 | 5,850 | - | 57,139 | 7.5% |
Fidelity Information Technology | 78,426 | 7,563 | - | 67,883 | 7.5% |
Fidelity Materials Central Fund | 17,546 | 1,883 | - | 18,831 | 7.5% |
Fidelity Tactical Income Central Fund | 1,187,781 | 31,269 | - | 1,193,567 | 24.4% |
Fidelity Telecom Services | 16,929 | 1,558 | - | 13,423 | 7.5% |
Fidelity Utilities | 17,006 | 1,995 | - | 17,725 | 7.5% |
Total | $ 1,759,111 | $ 87,776 | $ - | $ 1,745,574 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value (including repurchase agreements of $83,873) - See accompanying schedule: Unaffiliated issuers (cost $87,364) | $ 87,366 | |
Fidelity Central Funds (cost $2,405,401) | 2,392,886 | |
Total Investments (cost $2,492,765) | $ 2,480,252 | |
Cash | 1 | |
Receivable for fund shares sold | 3,780 | |
Distributions receivable from Fidelity Central Funds | 7,369 | |
Receivable for daily variation on futures contracts | 232 | |
Prepaid expenses | 6 | |
Other receivables | 1 | |
Total assets | 2,491,641 | |
Liabilities | ||
Payable for investments purchased | $ 4,994 | |
Payable for fund shares redeemed | 3,869 | |
Accrued management fee | 858 | |
Distribution fees payable | 7 | |
Other affiliated payables | 284 | |
Other payables and accrued expenses | 87 | |
Total liabilities | 10,099 | |
Net Assets | $ 2,481,542 | |
Net Assets consist of: | ||
Paid in capital | $ 2,544,658 | |
Undistributed net investment income | 7,844 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (59,868) | |
Net unrealized appreciation (depreciation) on investments | (11,092) | |
Net Assets | $ 2,481,542 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Calculation of Maximum Offering Price | $ 12.08 | |
Maximum offering price per share (100/94.25 of $12.08) | $ 12.82 | |
Class T: | $ 12.06 | |
Maximum offering price per share (100/96.50 of $12.06) | $ 12.50 | |
Class B: | $ 12.05 | |
Class C: | $ 12.04 | |
Asset Manager 20%: | $ 12.09 | |
Institutional Class: | $ 12.09 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Interest | $ 2,019 | |
Income from Fidelity Central Funds | 52,710 | |
Total income | 54,729 | |
Expenses | ||
Management fee | $ 5,214 | |
Transfer agent fees | 1,297 | |
Distribution fees | 35 | |
Accounting fees and expenses | 407 | |
Custodian fees and expenses | 3 | |
Independent trustees' compensation | 5 | |
Registration fees | 66 | |
Audit | 32 | |
Legal | 8 | |
Miscellaneous | 7 | |
Total expenses before reductions | 7,074 | |
Expense reductions | (43) | 7,031 |
Net investment income (loss) | 47,698 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 173 | |
Foreign currency transactions | (2) | |
Futures contracts | (8,148) | |
Total net realized gain (loss) | (7,977) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (101,312) | |
Futures contracts | 47 | |
Total change in net unrealized appreciation (depreciation) | (101,265) | |
Net gain (loss) | (109,242) | |
Net increase (decrease) in net assets resulting from operations | $ (61,544) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 47,698 | $ 96,616 |
Net realized gain (loss) | (7,977) | 9,978 |
Change in net unrealized appreciation (depreciation) | (101,265) | 54,095 |
Net increase (decrease) in net assets resulting | (61,544) | 160,689 |
Distributions to shareholders from net investment income | (52,524) | (97,255) |
Distributions to shareholders from net realized gain | (49,576) | (97,648) |
Total distributions | (102,100) | (194,903) |
Share transactions - net increase (decrease) | 125,394 | 423,256 |
Total increase (decrease) in net assets | (38,250) | 389,042 |
Net Assets | ||
Beginning of period | 2,519,792 | 2,130,750 |
End of period (including undistributed net investment income of $7,844 and undistributed net investment income of $12,670, respectively) | $ 2,481,542 | $ 2,519,792 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.90 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .22 | .48 |
Net realized and unrealized gain (loss) | (.54) | .40 |
Total from investment operations | (.32) | .88 |
Distributions from net investment income | (.25) | (.52) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.50) | (1.11) |
Net asset value, end of period | $ 12.08 | $ 12.90 |
Total Return B,C,D | (2.59)% | 7.03% |
Ratios to Average Net Assets H | ||
Expenses before reductions | .86% A | .87% A |
Expenses net of fee waivers, if any | .86% A | .87% A |
Expenses net of all reductions | .86% A | .87% A |
Net investment income (loss) | 3.49% A | 3.84% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 8 | $ 3 |
Portfolio turnover rate F | 0% | 6% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.88 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .20 | .45 |
Net realized and unrealized gain (loss) | (.54) | .40 |
Total from investment operations | (.34) | .85 |
Distributions from net investment income | (.23) | (.51) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.48) | (1.10) |
Net asset value, end of period | $ 12.06 | $ 12.88 |
Total Return B,C,D | (2.73)% | 6.75% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.11% A | 1.11% A |
Expenses net of fee waivers, if any | 1.11% A | 1.11% A |
Expenses net of all reductions | 1.10% A | 1.11% A |
Net investment income (loss) | 3.25% A | 3.60% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 4 | $ 4 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.87 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.37) | .77 |
Distributions from net investment income | (.20) | (.44) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.45) | (1.03) |
Net asset value, end of period | $ 12.05 | $ 12.87 |
Total Return B,C,D | (2.96)% | 6.13% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.67% A | 1.65% A |
Expenses net of fee waivers, if any | 1.67% A | 1.65% A |
Expenses net of all reductions | 1.67% A | 1.65% A |
Net investment income (loss) | 2.69% A | 3.06% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 2 | $ 1 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.86 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.37) | .77 |
Distributions from net investment income | (.20) | (.45) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.45) | (1.04) |
Net asset value, end of period | $ 12.04 | $ 12.86 |
Total Return B,C,D | (2.96)% | 6.15% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.65% A | 1.64% A |
Expenses net of fee waivers, if any | 1.65% A | 1.64% A |
Expenses net of all reductions | 1.65% A | 1.64% A |
Net investment income (loss) | 2.71% A | 3.07% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 3 | $ 2 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 20%
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 12.91 | $ 13.14 | $ 13.00 | $ 12.25 | $ 11.80 | $ 10.61 |
Income from Investment Operations | ||||||
Net investment income (loss) D | .24 | .53 | .46 | .33 | .23 | .30 |
Net realized and unrealized gain (loss) | (.55) | .38 | .39 | .74 | .45 | 1.19 |
Total from investment operations | (.31) | .91 | .85 | 1.07 | .68 | 1.49 |
Distributions from net investment income | (.26) | (.55) | (.43) | (.32) | (.23) | (.30) |
Distributions from net realized gain | (.25) | (.59) | (.28) | - | - | - |
Total distributions | (.51) | (1.14) | (.71) | (.32) | (.23) | (.30) |
Net asset value, end of period | $ 12.09 | $ 12.91 | $ 13.14 | $ 13.00 | $ 12.25 | $ 11.80 |
Total Return B,C | (2.45)% | 7.26% | 6.77% | 8.85% | 5.80% | 14.26% |
Ratios to Average Net Assets F | ||||||
Expenses before reductions | .56% A | .57% | .58% | .60% | .63% | .64% |
Expenses net of fee waivers, if any | .56% A | .57% | .58% | .60% | .63% | .64% |
Expenses net of all reductions | .56% A | .57% | .57% | .58% | .61% | .61% |
Net investment income (loss) | 3.80% A | 4.15% | 3.58% | 2.64% | 1.86% | 2.69% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 2,463 | $ 2,509 | $ 2,131 | $ 1,724 | $ 1,395 | $ 971 |
Portfolio turnover rate E | 0% | 6% | 81% G | 81% G | 232% | 276% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.90 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) D | .24 | .53 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.30) | .91 |
Distributions from net investment income | (.26) | (.55) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.51) | (1.14) |
Net asset value, end of period | $ 12.09 | $ 12.90 |
Total Return B,C | (2.38)% | 7.24% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .56% A | .59% A |
Expenses net of fee waivers, if any | .56% A | .59% A |
Expenses net of all reductions | .56% A | .59% A |
Net investment income (loss) | 3.79% A | 4.13% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,984 | $ 248 |
Portfolio turnover rate E | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 20% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 20% and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
Fidelity | Investment | Investment | Investment | Expense Ratio* |
Fidelity Equity Sector | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Fidelity Floating Rate | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income | Fidelity Investments Money Management, Inc. (FIMM) FIMM | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund
Semiannual Report
3. Significant Accounting Policies - continued
Expenses - continued
indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three year fiscal years remains subject to examination by the Internal Revenue Service. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and foreign currency transactions.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 30,446 | |
Unrealized depreciation | (87,911) | |
Net unrealized appreciation (depreciation) | $ (57,465) | |
Cost for federal income tax purposes | $ 2,537,717 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures
Semiannual Report
4. Operating Policies - continued
Futures Contracts - continued
contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $87,776 and $0, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .41% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 7 | $ 1 |
Class T | .25% | .25% | 10 | - |
Class B | .75% | .25% | 7 | 5 |
Class C | .75% | .25% | 11 | 6 |
$ 35 | $ 12 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 22 |
Class T | 3 |
Class B* | 1 |
Class C* | 1 |
$ 27 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 20% shares. For the period, each class paid the following transfer agent fees:
Amount | % of | |
Class A | $ 4 | .15 |
Class T | 3 | .15 |
Class B | 1 | .21 |
Class C | 2 | .18 |
Asset Manager 20% | 1,286 | .10 |
Institutional Class | 1 | .11 |
$ 1,297 |
* Annualized
Accounting Fees. FSC maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $3 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 20%'s operating expenses. During the period, this reimbursement reduced the class' expenses by $9.
Effective May 1, 2008 the expense limitation will be changed to .90%, 1.15%, 1.65%, 1.65% and .65% for Class A, T, B, C, and Institutional, respectively.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $11 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Asset Manager 20% | $ 23 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $81,877, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
Semiannual Report
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 104 | $ 40 |
Class T | 77 | 49 |
Class B | 20 | 12 |
Class C | 32 | 21 |
Asset Manager 20% | 52,251 | 97,126 |
Institutional Class | 40 | 7 |
Total | $ 52,524 | $ 97,255 |
From net realized gain | ||
Class A | $ 112 | $ 5 |
Class T | 89 | 20 |
Class B | 24 | 10 |
Class C | 35 | 9 |
Asset Manager 20% | 49,278 | 97,599 |
Institutional Class | 38 | 5 |
Total | $ 49,576 | $ 97,648 |
A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class A | ||||
Shares sold | 457 | 270 | $ 5,709 | $ 3,462 |
Reinvestment of distributions | 13 | 3 | 158 | 33 |
Shares redeemed | (114) | (8) | (1,416) | (106) |
Net increase (decrease) | 356 | 265 | $ 4,451 | $ 3,389 |
Class T | ||||
Shares sold | 119 | 314 | $ 1,475 | $ 4,039 |
Reinvestment of distributions | 12 | 5 | 152 | 64 |
Shares redeemed | (66) | (12) | (815) | (158) |
Net increase (decrease) | 65 | 307 | $ 812 | $ 3,945 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class B | ||||
Shares sold | 83 | 87 | $ 1,025 | $ 1,120 |
Reinvestment of distributions | 3 | 2 | 39 | 20 |
Shares redeemed | (14) | (12) | (176) | (149) |
Net increase (decrease) | 72 | 77 | $ 888 | $ 991 |
Class C | ||||
Shares sold | 134 | 138 | $ 1,649 | $ 1,774 |
Reinvestment of distributions | 4 | 2 | 46 | 22 |
Shares redeemed | (22) | (8) | (277) | (103) |
Net increase (decrease) | 116 | 132 | $ 1,418 | $ 1,693 |
Asset Manager 20% | ||||
Shares sold | 33,631 | 63,398 | $ 420,669 | $ 815,354 |
Reinvestment of distributions | 7,833 | 14,706 | 97,739 | 187,332 |
Shares redeemed | (32,222) | (45,832) | (402,452) | (589,696) |
Net increase (decrease) | 9,242 | 32,272 | $ 115,956 | $ 412,990 |
Institutional Class | ||||
Shares sold | 169 | 18 | $ 2,163 | $ 239 |
Reinvestment of distributions | 6 | 1 | 72 | 9 |
Shares redeemed | (30) | - | (366) | - |
Net increase (decrease) | 145 | 19 | $ 1,869 | $ 248 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
Arizona
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Scottsdale, AZ
California
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Burlingame, CA
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Los Angeles, CA
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73-575 El Paseo
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1220 Roseville Parkway
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Colorado
281 East Flatiron Circle
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1625 Broadway
Denver, CO
9185 Westview Road
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Connecticut
48 West Putnam Avenue
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Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
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2948 N. Federal Highway
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4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
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1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
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Chicago, IL
401 North Michigan Avenue
Chicago, IL
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Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
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Portland, ME
Maryland
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Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
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Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
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Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Co. (FRAC)
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
(for the deaf and hearing impaired)
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
AMI-USAN-0508
1.792155.104
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager 20% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
Class A, Class T,
Class B, and Class C
are classes of Fidelity
Asset Manager® 20%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 974.10 | $ 4.24 |
HypotheticalA | $ 1,000.00 | $ 1,020.70 | $ 4.34 |
Class T | |||
Actual | $ 1,000.00 | $ 972.70 | $ 5.47 |
HypotheticalA | $ 1,000.00 | $ 1,019.45 | $ 5.60 |
Class B | |||
Actual | $ 1,000.00 | $ 970.40 | $ 8.23** |
HypotheticalA | $ 1,000.00 | $ 1,016.65 | $ 8.42** |
Class C | |||
Actual | $ 1,000.00 | $ 970.40 | $ 8.13 |
HypotheticalA | $ 1,000.00 | $ 1,016.75 | $ 8.32 |
Asset Manager 20% | |||
Actual | $ 1,000.00 | $ 975.50 | $ 2.77 |
HypotheticalA | $ 1,000.00 | $ 1,022.20 | $ 2.83 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 976.20 | $ 2.77 |
HypotheticalA | $ 1,000.00 | $ 1,022.20 | $ 2.83 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | .86% |
Class T | 1.11% |
Class B | 1.67%** |
Class C | 1.65% |
Asset Manager 20% | .56% |
Institutional Class | .56% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Shareholder Expense Example - continued
** If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratio and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized | Expenses | |
Class B | ||
Actual | 1.65% | $ 8.13 |
HypotheticalA | $ 8.32 |
A 5% return per year before expenses
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
Fannie Mae | 16.4 | 13.5 |
Freddie Mac | 5.8 | 5.0 |
U.S. Treasury Obligations | 5.4 | 6.2 |
Government National Mortgage Association | 1.9 | 0.9 |
Wells Fargo Mortgage Backed Securities Trust | 0.6 | 0.6 |
30.1 | ||
Quality Diversification (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| U.S. Government and U.S. Government | | U.S. Government and U.S. Government | ||||
| AAA,AA,A 12.9% | | AAA,AA,A 16.7% | ||||
| BBB 9.5% | | BBB 9.3% | ||||
| BB and Below 4.6% | | BB and Below 4.4% | ||||
| Not Rated 0.4% | | Not Rated 0.8% | ||||
| Equities 20.2% | | Equities 20.5% | ||||
| Short-Term | | Short-Term | ||||
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent down-grades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.3 | 0.3 |
Procter & Gamble Co. | 0.3 | 0.3 |
Nintendo Co. Ltd. | 0.2 | 0.0 |
General Electric Co. | 0.2 | 0.3 |
JPMorgan Chase & Co. | 0.2 | 0.2 |
1.2 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 57.1% | | Bond class 60.7% | ||||
| Short-Term class 22.8% | | Short-Term class 18.7% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 3.1 |
Fidelity Information Technology Central Fund | 2.7 |
Fidelity Energy Central Fund | 2.3 |
Fidelity Industrials Central Fund | 2.3 |
Fidelity Health Care Central Fund | 2.1 |
Fidelity Consumer Discretionary Central Fund | 1.8 |
Fidelity Consumer Staples Central Fund | 1.8 |
Fidelity Materials Central Fund | 0.8 |
Fidelity Utilities Central Fund | 0.7 |
Fidelity Telecom Services Central Fund | 0.6 |
Total Equity Central Funds | 18.2 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 48.1 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 52.1 |
Money Market Central Funds | 26.1 |
Other Short-Term Investments and Net Other Assets | 3.6 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 7.4% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 18.2% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 447,565 | $ 45,343 | ||
Fidelity Consumer Staples Central Fund (c) | 353,178 | 44,797 | ||
Fidelity Energy Central Fund (c) | 402,299 | 57,963 | ||
Fidelity Financials Central Fund (c) | 912,062 | 76,066 | ||
Fidelity Health Care Central Fund (c) | 510,652 | 52,291 | ||
Fidelity Industrials Central Fund (c) | 462,586 | 57,139 | ||
Fidelity Information Technology Central Fund (c) | 583,392 | 67,883 | ||
Fidelity Materials Central Fund (c) | 133,437 | 18,831 | ||
Fidelity Telecom Services Central Fund (c) | 124,126 | 13,423 | ||
Fidelity Utilities Central Fund (c) | 153,983 | 17,725 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $419,280) | 451,461 | |||
Fixed-Income Central Funds - 52.1% | ||||
Investment Grade Fixed-Income Funds - 48.1% | ||||
Fidelity Tactical Income Central Fund (c) | 12,587,709 | 1,193,567 | ||
High Yield Fixed-Income Funds - 4.0% | ||||
Fidelity Floating Rate Central Fund (c) | 628,271 | 55,834 | ||
Fidelity High Income Central Fund 1 (c) | 481,858 | 44,712 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 100,546 | |||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $1,338,809) | 1,294,113 | |||
Money Market Central Funds - 26.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 511,762,184 | 511,762 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 135,550,134 | 135,550 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $647,312) | 647,312 | |||
U.S. Treasury Obligations - 0.1% | ||||
Principal Amount (000s) | ||||
U.S. Treasury Bills, yield at date of purchase 1.4% to 3.09% 4/10/08 to 6/5/08 (b) | $ 3,500 | 3,493 | ||
Cash Equivalents - 3.4% | ||||
Maturity Amount (000s) | Value (000s) | |||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 83,876 | $ 83,873 | ||
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $2,492,765) | 2,480,252 | |||
NET OTHER ASSETS - 0.1% | 1,290 | |||
NET ASSETS - 100% | $ 2,481,542 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
911 S&P 500 E-Mini Index Contracts | June 2008 | $ 60,308 | $ 1,421 | ||
The face value of futures purchased as a percentage of net assets - 2.4% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $3,493,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement/Counterparty | Value |
$83,873,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 57,403 |
Barclays Capital, Inc. | 195 |
Lehman Brothers, Inc. | 26,275 |
$ 83,873 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 10,613 |
Fidelity Consumer Discretionary Central Fund | 356 |
Fidelity Consumer Staples Central Fund | 402 |
Fidelity Energy Central Fund | 209 |
Fidelity Financials Central Fund | 1,162 |
Fidelity Floating Rate Central Fund | 2,273 |
Fidelity Health Care Central Fund | 278 |
Fidelity High Income Central Fund 1 | 1,689 |
Fidelity Industrials Central Fund | 416 |
Fidelity Information Technology Central Fund | 258 |
Fidelity Materials Central Fund | 193 |
Fidelity Money Market Central Fund | 3,253 |
Fidelity Tactical Income Central Fund | 31,270 |
Fidelity Telecom Services Central Fund | 148 |
Fidelity Utilities Central Fund | 190 |
Total | $ 52,710 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary | $ 48,742 | $ 4,855 | $ - | $ 45,343 | 7.5% |
Fidelity Consumer Staples Central Fund | 39,907 | 4,598 | - | 44,797 | 7.5% |
Fidelity Energy | 50,544 | 5,837 | - | 57,963 | 7.5% |
Fidelity Financials Central Fund | 90,663 | 8,491 | - | 76,066 | 7.5% |
Fidelity Floating Rate Central Fund | 61,332 | - | - | 55,834 | 2.3% |
Fidelity Health Care Central Fund | 54,673 | 6,379 | - | 52,291 | 7.5% |
Fidelity High Income Central Fund 1 | 39,618 | 7,498 | - | 44,712 | 17.2% |
Fidelity Industrials Central Fund | 55,944 | 5,850 | - | 57,139 | 7.5% |
Fidelity Information Technology | 78,426 | 7,563 | - | 67,883 | 7.5% |
Fidelity Materials Central Fund | 17,546 | 1,883 | - | 18,831 | 7.5% |
Fidelity Tactical Income Central Fund | 1,187,781 | 31,269 | - | 1,193,567 | 24.4% |
Fidelity Telecom Services | 16,929 | 1,558 | - | 13,423 | 7.5% |
Fidelity Utilities | 17,006 | 1,995 | - | 17,725 | 7.5% |
Total | $ 1,759,111 | $ 87,776 | $ - | $ 1,745,574 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value (including repurchase agreements of $83,873) - See accompanying schedule: Unaffiliated issuers (cost $87,364) | $ 87,366 | |
Fidelity Central Funds (cost $2,405,401) | 2,392,886 | |
Total Investments (cost $2,492,765) | $ 2,480,252 | |
Cash | 1 | |
Receivable for fund shares sold | 3,780 | |
Distributions receivable from Fidelity Central Funds | 7,369 | |
Receivable for daily variation on futures contracts | 232 | |
Prepaid expenses | 6 | |
Other receivables | 1 | |
Total assets | 2,491,641 | |
Liabilities | ||
Payable for investments purchased | $ 4,994 | |
Payable for fund shares redeemed | 3,869 | |
Accrued management fee | 858 | |
Distribution fees payable | 7 | |
Other affiliated payables | 284 | |
Other payables and accrued expenses | 87 | |
Total liabilities | 10,099 | |
Net Assets | $ 2,481,542 | |
Net Assets consist of: | ||
Paid in capital | $ 2,544,658 | |
Undistributed net investment income | 7,844 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (59,868) | |
Net unrealized appreciation (depreciation) on investments | (11,092) | |
Net Assets | $ 2,481,542 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Calculation of Maximum Offering Price | $ 12.08 | |
Maximum offering price per share (100/94.25 of $12.08) | $ 12.82 | |
Class T: | $ 12.06 | |
Maximum offering price per share (100/96.50 of $12.06) | $ 12.50 | |
Class B: | $ 12.05 | |
Class C: | $ 12.04 | |
Asset Manager 20%: | $ 12.09 | |
Institutional Class: | $ 12.09 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Interest | $ 2,019 | |
Income from Fidelity Central Funds | 52,710 | |
Total income | 54,729 | |
Expenses | ||
Management fee | $ 5,214 | |
Transfer agent fees | 1,297 | |
Distribution fees | 35 | |
Accounting fees and expenses | 407 | |
Custodian fees and expenses | 3 | |
Independent trustees' compensation | 5 | |
Registration fees | 66 | |
Audit | 32 | |
Legal | 8 | |
Miscellaneous | 7 | |
Total expenses before reductions | 7,074 | |
Expense reductions | (43) | 7,031 |
Net investment income (loss) | 47,698 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 173 | |
Foreign currency transactions | (2) | |
Futures contracts | (8,148) | |
Total net realized gain (loss) | (7,977) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (101,312) | |
Futures contracts | 47 | |
Total change in net unrealized appreciation (depreciation) | (101,265) | |
Net gain (loss) | (109,242) | |
Net increase (decrease) in net assets resulting from operations | $ (61,544) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 47,698 | $ 96,616 |
Net realized gain (loss) | (7,977) | 9,978 |
Change in net unrealized appreciation (depreciation) | (101,265) | 54,095 |
Net increase (decrease) in net assets resulting | (61,544) | 160,689 |
Distributions to shareholders from net investment income | (52,524) | (97,255) |
Distributions to shareholders from net realized gain | (49,576) | (97,648) |
Total distributions | (102,100) | (194,903) |
Share transactions - net increase (decrease) | 125,394 | 423,256 |
Total increase (decrease) in net assets | (38,250) | 389,042 |
Net Assets | ||
Beginning of period | 2,519,792 | 2,130,750 |
End of period (including undistributed net investment income of $7,844 and undistributed net investment income of $12,670, respectively) | $ 2,481,542 | $ 2,519,792 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.90 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .22 | .48 |
Net realized and unrealized gain (loss) | (.54) | .40 |
Total from investment operations | (.32) | .88 |
Distributions from net investment income | (.25) | (.52) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.50) | (1.11) |
Net asset value, end of period | $ 12.08 | $ 12.90 |
Total Return B,C,D | (2.59)% | 7.03% |
Ratios to Average Net Assets H | ||
Expenses before reductions | .86% A | .87% A |
Expenses net of fee waivers, if any | .86% A | .87% A |
Expenses net of all reductions | .86% A | .87% A |
Net investment income (loss) | 3.49% A | 3.84% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 8 | $ 3 |
Portfolio turnover rate F | 0% | 6% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.88 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .20 | .45 |
Net realized and unrealized gain (loss) | (.54) | .40 |
Total from investment operations | (.34) | .85 |
Distributions from net investment income | (.23) | (.51) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.48) | (1.10) |
Net asset value, end of period | $ 12.06 | $ 12.88 |
Total Return B,C,D | (2.73)% | 6.75% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.11% A | 1.11% A |
Expenses net of fee waivers, if any | 1.11% A | 1.11% A |
Expenses net of all reductions | 1.10% A | 1.11% A |
Net investment income (loss) | 3.25% A | 3.60% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 4 | $ 4 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.87 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.37) | .77 |
Distributions from net investment income | (.20) | (.44) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.45) | (1.03) |
Net asset value, end of period | $ 12.05 | $ 12.87 |
Total Return B,C,D | (2.96)% | 6.13% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.67% A | 1.65% A |
Expenses net of fee waivers, if any | 1.67% A | 1.65% A |
Expenses net of all reductions | 1.67% A | 1.65% A |
Net investment income (loss) | 2.69% A | 3.06% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 2 | $ 1 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.86 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.37) | .77 |
Distributions from net investment income | (.20) | (.45) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.45) | (1.04) |
Net asset value, end of period | $ 12.04 | $ 12.86 |
Total Return B,C,D | (2.96)% | 6.15% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.65% A | 1.64% A |
Expenses net of fee waivers, if any | 1.65% A | 1.64% A |
Expenses net of all reductions | 1.65% A | 1.64% A |
Net investment income (loss) | 2.71% A | 3.07% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 3 | $ 2 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 20%
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 12.91 | $ 13.14 | $ 13.00 | $ 12.25 | $ 11.80 | $ 10.61 |
Income from Investment Operations | ||||||
Net investment income (loss) D | .24 | .53 | .46 | .33 | .23 | .30 |
Net realized and unrealized gain (loss) | (.55) | .38 | .39 | .74 | .45 | 1.19 |
Total from investment operations | (.31) | .91 | .85 | 1.07 | .68 | 1.49 |
Distributions from net investment income | (.26) | (.55) | (.43) | (.32) | (.23) | (.30) |
Distributions from net realized gain | (.25) | (.59) | (.28) | - | - | - |
Total distributions | (.51) | (1.14) | (.71) | (.32) | (.23) | (.30) |
Net asset value, end of period | $ 12.09 | $ 12.91 | $ 13.14 | $ 13.00 | $ 12.25 | $ 11.80 |
Total Return B,C | (2.45)% | 7.26% | 6.77% | 8.85% | 5.80% | 14.26% |
Ratios to Average Net Assets F | ||||||
Expenses before reductions | .56% A | .57% | .58% | .60% | .63% | .64% |
Expenses net of fee waivers, if any | .56% A | .57% | .58% | .60% | .63% | .64% |
Expenses net of all reductions | .56% A | .57% | .57% | .58% | .61% | .61% |
Net investment income (loss) | 3.80% A | 4.15% | 3.58% | 2.64% | 1.86% | 2.69% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 2,463 | $ 2,509 | $ 2,131 | $ 1,724 | $ 1,395 | $ 971 |
Portfolio turnover rate E | 0% | 6% | 81% G | 81% G | 232% | 276% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.90 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) D | .24 | .53 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.30) | .91 |
Distributions from net investment income | (.26) | (.55) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.51) | (1.14) |
Net asset value, end of period | $ 12.09 | $ 12.90 |
Total Return B,C | (2.38)% | 7.24% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .56% A | .59% A |
Expenses net of fee waivers, if any | .56% A | .59% A |
Expenses net of all reductions | .56% A | .59% A |
Net investment income (loss) | 3.79% A | 4.13% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,984 | $ 248 |
Portfolio turnover rate E | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 20% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 20% and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
Fidelity | Investment | Investment | Investment | Expense Ratio* |
Fidelity Equity Sector | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Fidelity Floating Rate | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income | Fidelity Investments Money Management, Inc. (FIMM) FIMM | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund
Semiannual Report
3. Significant Accounting Policies - continued
Expenses - continued
indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three year fiscal years remains subject to examination by the Internal Revenue Service. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and foreign currency transactions.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 30,446 | |
Unrealized depreciation | (87,911) | |
Net unrealized appreciation (depreciation) | $ (57,465) | |
Cost for federal income tax purposes | $ 2,537,717 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures
Semiannual Report
4. Operating Policies - continued
Futures Contracts - continued
contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $87,776 and $0, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .41% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 7 | $ 1 |
Class T | .25% | .25% | 10 | - |
Class B | .75% | .25% | 7 | 5 |
Class C | .75% | .25% | 11 | 6 |
$ 35 | $ 12 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 22 |
Class T | 3 |
Class B* | 1 |
Class C* | 1 |
$ 27 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 20% shares. For the period, each class paid the following transfer agent fees:
Amount | % of | |
Class A | $ 4 | .15 |
Class T | 3 | .15 |
Class B | 1 | .21 |
Class C | 2 | .18 |
Asset Manager 20% | 1,286 | .10 |
Institutional Class | 1 | .11 |
$ 1,297 |
* Annualized
Accounting Fees. FSC maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $3 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 20%'s operating expenses. During the period, this reimbursement reduced the class' expenses by $9.
Effective May 1, 2008 the expense limitation will be changed to .90%, 1.15%, 1.65%, 1.65% and .65% for Class A, T, B, C, and Institutional, respectively.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $11 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Asset Manager 20% | $ 23 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $81,877, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
Semiannual Report
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 104 | $ 40 |
Class T | 77 | 49 |
Class B | 20 | 12 |
Class C | 32 | 21 |
Asset Manager 20% | 52,251 | 97,126 |
Institutional Class | 40 | 7 |
Total | $ 52,524 | $ 97,255 |
From net realized gain | ||
Class A | $ 112 | $ 5 |
Class T | 89 | 20 |
Class B | 24 | 10 |
Class C | 35 | 9 |
Asset Manager 20% | 49,278 | 97,599 |
Institutional Class | 38 | 5 |
Total | $ 49,576 | $ 97,648 |
A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class A | ||||
Shares sold | 457 | 270 | $ 5,709 | $ 3,462 |
Reinvestment of distributions | 13 | 3 | 158 | 33 |
Shares redeemed | (114) | (8) | (1,416) | (106) |
Net increase (decrease) | 356 | 265 | $ 4,451 | $ 3,389 |
Class T | ||||
Shares sold | 119 | 314 | $ 1,475 | $ 4,039 |
Reinvestment of distributions | 12 | 5 | 152 | 64 |
Shares redeemed | (66) | (12) | (815) | (158) |
Net increase (decrease) | 65 | 307 | $ 812 | $ 3,945 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class B | ||||
Shares sold | 83 | 87 | $ 1,025 | $ 1,120 |
Reinvestment of distributions | 3 | 2 | 39 | 20 |
Shares redeemed | (14) | (12) | (176) | (149) |
Net increase (decrease) | 72 | 77 | $ 888 | $ 991 |
Class C | ||||
Shares sold | 134 | 138 | $ 1,649 | $ 1,774 |
Reinvestment of distributions | 4 | 2 | 46 | 22 |
Shares redeemed | (22) | (8) | (277) | (103) |
Net increase (decrease) | 116 | 132 | $ 1,418 | $ 1,693 |
Asset Manager 20% | ||||
Shares sold | 33,631 | 63,398 | $ 420,669 | $ 815,354 |
Reinvestment of distributions | 7,833 | 14,706 | 97,739 | 187,332 |
Shares redeemed | (32,222) | (45,832) | (402,452) | (589,696) |
Net increase (decrease) | 9,242 | 32,272 | $ 115,956 | $ 412,990 |
Institutional Class | ||||
Shares sold | 169 | 18 | $ 2,163 | $ 239 |
Reinvestment of distributions | 6 | 1 | 72 | 9 |
Shares redeemed | (30) | - | (366) | - |
Net increase (decrease) | 145 | 19 | $ 1,869 | $ 248 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Co. (FRAC)
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AAM20-USAN-0508
1.834318.101
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager 20% -
Institutional Class
Semiannual Report
March 31, 2008
Institutional Class is
a class of Fidelity
Asset Manager® 20%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 974.10 | $ 4.24 |
HypotheticalA | $ 1,000.00 | $ 1,020.70 | $ 4.34 |
Class T | |||
Actual | $ 1,000.00 | $ 972.70 | $ 5.47 |
HypotheticalA | $ 1,000.00 | $ 1,019.45 | $ 5.60 |
Class B | |||
Actual | $ 1,000.00 | $ 970.40 | $ 8.23** |
HypotheticalA | $ 1,000.00 | $ 1,016.65 | $ 8.42** |
Class C | |||
Actual | $ 1,000.00 | $ 970.40 | $ 8.13 |
HypotheticalA | $ 1,000.00 | $ 1,016.75 | $ 8.32 |
Asset Manager 20% | |||
Actual | $ 1,000.00 | $ 975.50 | $ 2.77 |
HypotheticalA | $ 1,000.00 | $ 1,022.20 | $ 2.83 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 976.20 | $ 2.77 |
HypotheticalA | $ 1,000.00 | $ 1,022.20 | $ 2.83 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | .86% |
Class T | 1.11% |
Class B | 1.67%** |
Class C | 1.65% |
Asset Manager 20% | .56% |
Institutional Class | .56% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Shareholder Expense Example - continued
** If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratio and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized | Expenses | |
Class B | ||
Actual | 1.65% | $ 8.13 |
HypotheticalA | $ 8.32 |
A 5% return per year before expenses
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
Fannie Mae | 16.4 | 13.5 |
Freddie Mac | 5.8 | 5.0 |
U.S. Treasury Obligations | 5.4 | 6.2 |
Government National Mortgage Association | 1.9 | 0.9 |
Wells Fargo Mortgage Backed Securities Trust | 0.6 | 0.6 |
30.1 | ||
Quality Diversification (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| U.S. Government and U.S. Government | | U.S. Government and U.S. Government | ||||
| AAA,AA,A 12.9% | | AAA,AA,A 16.7% | ||||
| BBB 9.5% | | BBB 9.3% | ||||
| BB and Below 4.6% | | BB and Below 4.4% | ||||
| Not Rated 0.4% | | Not Rated 0.8% | ||||
| Equities 20.2% | | Equities 20.5% | ||||
| Short-Term | | Short-Term | ||||
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent down-grades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.3 | 0.3 |
Procter & Gamble Co. | 0.3 | 0.3 |
Nintendo Co. Ltd. | 0.2 | 0.0 |
General Electric Co. | 0.2 | 0.3 |
JPMorgan Chase & Co. | 0.2 | 0.2 |
1.2 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 57.1% | | Bond class 60.7% | ||||
| Short-Term class 22.8% | | Short-Term class 18.7% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 3.1 |
Fidelity Information Technology Central Fund | 2.7 |
Fidelity Energy Central Fund | 2.3 |
Fidelity Industrials Central Fund | 2.3 |
Fidelity Health Care Central Fund | 2.1 |
Fidelity Consumer Discretionary Central Fund | 1.8 |
Fidelity Consumer Staples Central Fund | 1.8 |
Fidelity Materials Central Fund | 0.8 |
Fidelity Utilities Central Fund | 0.7 |
Fidelity Telecom Services Central Fund | 0.6 |
Total Equity Central Funds | 18.2 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 48.1 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 52.1 |
Money Market Central Funds | 26.1 |
Other Short-Term Investments and Net Other Assets | 3.6 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 7.4% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 18.2% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 447,565 | $ 45,343 | ||
Fidelity Consumer Staples Central Fund (c) | 353,178 | 44,797 | ||
Fidelity Energy Central Fund (c) | 402,299 | 57,963 | ||
Fidelity Financials Central Fund (c) | 912,062 | 76,066 | ||
Fidelity Health Care Central Fund (c) | 510,652 | 52,291 | ||
Fidelity Industrials Central Fund (c) | 462,586 | 57,139 | ||
Fidelity Information Technology Central Fund (c) | 583,392 | 67,883 | ||
Fidelity Materials Central Fund (c) | 133,437 | 18,831 | ||
Fidelity Telecom Services Central Fund (c) | 124,126 | 13,423 | ||
Fidelity Utilities Central Fund (c) | 153,983 | 17,725 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $419,280) | 451,461 | |||
Fixed-Income Central Funds - 52.1% | ||||
Investment Grade Fixed-Income Funds - 48.1% | ||||
Fidelity Tactical Income Central Fund (c) | 12,587,709 | 1,193,567 | ||
High Yield Fixed-Income Funds - 4.0% | ||||
Fidelity Floating Rate Central Fund (c) | 628,271 | 55,834 | ||
Fidelity High Income Central Fund 1 (c) | 481,858 | 44,712 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 100,546 | |||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $1,338,809) | 1,294,113 | |||
Money Market Central Funds - 26.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 511,762,184 | 511,762 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 135,550,134 | 135,550 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $647,312) | 647,312 | |||
U.S. Treasury Obligations - 0.1% | ||||
Principal Amount (000s) | ||||
U.S. Treasury Bills, yield at date of purchase 1.4% to 3.09% 4/10/08 to 6/5/08 (b) | $ 3,500 | 3,493 | ||
Cash Equivalents - 3.4% | ||||
Maturity Amount (000s) | Value (000s) | |||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 83,876 | $ 83,873 | ||
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $2,492,765) | 2,480,252 | |||
NET OTHER ASSETS - 0.1% | 1,290 | |||
NET ASSETS - 100% | $ 2,481,542 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
911 S&P 500 E-Mini Index Contracts | June 2008 | $ 60,308 | $ 1,421 | ||
The face value of futures purchased as a percentage of net assets - 2.4% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $3,493,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement/Counterparty | Value |
$83,873,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 57,403 |
Barclays Capital, Inc. | 195 |
Lehman Brothers, Inc. | 26,275 |
$ 83,873 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 10,613 |
Fidelity Consumer Discretionary Central Fund | 356 |
Fidelity Consumer Staples Central Fund | 402 |
Fidelity Energy Central Fund | 209 |
Fidelity Financials Central Fund | 1,162 |
Fidelity Floating Rate Central Fund | 2,273 |
Fidelity Health Care Central Fund | 278 |
Fidelity High Income Central Fund 1 | 1,689 |
Fidelity Industrials Central Fund | 416 |
Fidelity Information Technology Central Fund | 258 |
Fidelity Materials Central Fund | 193 |
Fidelity Money Market Central Fund | 3,253 |
Fidelity Tactical Income Central Fund | 31,270 |
Fidelity Telecom Services Central Fund | 148 |
Fidelity Utilities Central Fund | 190 |
Total | $ 52,710 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary | $ 48,742 | $ 4,855 | $ - | $ 45,343 | 7.5% |
Fidelity Consumer Staples Central Fund | 39,907 | 4,598 | - | 44,797 | 7.5% |
Fidelity Energy | 50,544 | 5,837 | - | 57,963 | 7.5% |
Fidelity Financials Central Fund | 90,663 | 8,491 | - | 76,066 | 7.5% |
Fidelity Floating Rate Central Fund | 61,332 | - | - | 55,834 | 2.3% |
Fidelity Health Care Central Fund | 54,673 | 6,379 | - | 52,291 | 7.5% |
Fidelity High Income Central Fund 1 | 39,618 | 7,498 | - | 44,712 | 17.2% |
Fidelity Industrials Central Fund | 55,944 | 5,850 | - | 57,139 | 7.5% |
Fidelity Information Technology | 78,426 | 7,563 | - | 67,883 | 7.5% |
Fidelity Materials Central Fund | 17,546 | 1,883 | - | 18,831 | 7.5% |
Fidelity Tactical Income Central Fund | 1,187,781 | 31,269 | - | 1,193,567 | 24.4% |
Fidelity Telecom Services | 16,929 | 1,558 | - | 13,423 | 7.5% |
Fidelity Utilities | 17,006 | 1,995 | - | 17,725 | 7.5% |
Total | $ 1,759,111 | $ 87,776 | $ - | $ 1,745,574 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value (including repurchase agreements of $83,873) - See accompanying schedule: Unaffiliated issuers (cost $87,364) | $ 87,366 | |
Fidelity Central Funds (cost $2,405,401) | 2,392,886 | |
Total Investments (cost $2,492,765) | $ 2,480,252 | |
Cash | 1 | |
Receivable for fund shares sold | 3,780 | |
Distributions receivable from Fidelity Central Funds | 7,369 | |
Receivable for daily variation on futures contracts | 232 | |
Prepaid expenses | 6 | |
Other receivables | 1 | |
Total assets | 2,491,641 | |
Liabilities | ||
Payable for investments purchased | $ 4,994 | |
Payable for fund shares redeemed | 3,869 | |
Accrued management fee | 858 | |
Distribution fees payable | 7 | |
Other affiliated payables | 284 | |
Other payables and accrued expenses | 87 | |
Total liabilities | 10,099 | |
Net Assets | $ 2,481,542 | |
Net Assets consist of: | ||
Paid in capital | $ 2,544,658 | |
Undistributed net investment income | 7,844 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (59,868) | |
Net unrealized appreciation (depreciation) on investments | (11,092) | |
Net Assets | $ 2,481,542 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Calculation of Maximum Offering Price | $ 12.08 | |
Maximum offering price per share (100/94.25 of $12.08) | $ 12.82 | |
Class T: | $ 12.06 | |
Maximum offering price per share (100/96.50 of $12.06) | $ 12.50 | |
Class B: | $ 12.05 | |
Class C: | $ 12.04 | |
Asset Manager 20%: | $ 12.09 | |
Institutional Class: | $ 12.09 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Interest | $ 2,019 | |
Income from Fidelity Central Funds | 52,710 | |
Total income | 54,729 | |
Expenses | ||
Management fee | $ 5,214 | |
Transfer agent fees | 1,297 | |
Distribution fees | 35 | |
Accounting fees and expenses | 407 | |
Custodian fees and expenses | 3 | |
Independent trustees' compensation | 5 | |
Registration fees | 66 | |
Audit | 32 | |
Legal | 8 | |
Miscellaneous | 7 | |
Total expenses before reductions | 7,074 | |
Expense reductions | (43) | 7,031 |
Net investment income (loss) | 47,698 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 173 | |
Foreign currency transactions | (2) | |
Futures contracts | (8,148) | |
Total net realized gain (loss) | (7,977) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (101,312) | |
Futures contracts | 47 | |
Total change in net unrealized appreciation (depreciation) | (101,265) | |
Net gain (loss) | (109,242) | |
Net increase (decrease) in net assets resulting from operations | $ (61,544) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 47,698 | $ 96,616 |
Net realized gain (loss) | (7,977) | 9,978 |
Change in net unrealized appreciation (depreciation) | (101,265) | 54,095 |
Net increase (decrease) in net assets resulting | (61,544) | 160,689 |
Distributions to shareholders from net investment income | (52,524) | (97,255) |
Distributions to shareholders from net realized gain | (49,576) | (97,648) |
Total distributions | (102,100) | (194,903) |
Share transactions - net increase (decrease) | 125,394 | 423,256 |
Total increase (decrease) in net assets | (38,250) | 389,042 |
Net Assets | ||
Beginning of period | 2,519,792 | 2,130,750 |
End of period (including undistributed net investment income of $7,844 and undistributed net investment income of $12,670, respectively) | $ 2,481,542 | $ 2,519,792 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.90 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .22 | .48 |
Net realized and unrealized gain (loss) | (.54) | .40 |
Total from investment operations | (.32) | .88 |
Distributions from net investment income | (.25) | (.52) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.50) | (1.11) |
Net asset value, end of period | $ 12.08 | $ 12.90 |
Total Return B,C,D | (2.59)% | 7.03% |
Ratios to Average Net Assets H | ||
Expenses before reductions | .86% A | .87% A |
Expenses net of fee waivers, if any | .86% A | .87% A |
Expenses net of all reductions | .86% A | .87% A |
Net investment income (loss) | 3.49% A | 3.84% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 8 | $ 3 |
Portfolio turnover rate F | 0% | 6% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.88 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .20 | .45 |
Net realized and unrealized gain (loss) | (.54) | .40 |
Total from investment operations | (.34) | .85 |
Distributions from net investment income | (.23) | (.51) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.48) | (1.10) |
Net asset value, end of period | $ 12.06 | $ 12.88 |
Total Return B,C,D | (2.73)% | 6.75% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.11% A | 1.11% A |
Expenses net of fee waivers, if any | 1.11% A | 1.11% A |
Expenses net of all reductions | 1.10% A | 1.11% A |
Net investment income (loss) | 3.25% A | 3.60% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 4 | $ 4 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.87 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.37) | .77 |
Distributions from net investment income | (.20) | (.44) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.45) | (1.03) |
Net asset value, end of period | $ 12.05 | $ 12.87 |
Total Return B,C,D | (2.96)% | 6.13% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.67% A | 1.65% A |
Expenses net of fee waivers, if any | 1.67% A | 1.65% A |
Expenses net of all reductions | 1.67% A | 1.65% A |
Net investment income (loss) | 2.69% A | 3.06% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 2 | $ 1 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.86 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.37) | .77 |
Distributions from net investment income | (.20) | (.45) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.45) | (1.04) |
Net asset value, end of period | $ 12.04 | $ 12.86 |
Total Return B,C,D | (2.96)% | 6.15% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.65% A | 1.64% A |
Expenses net of fee waivers, if any | 1.65% A | 1.64% A |
Expenses net of all reductions | 1.65% A | 1.64% A |
Net investment income (loss) | 2.71% A | 3.07% A |
Supplemental Data | ||
Net assets, end of period (in millions) | $ 3 | $ 2 |
Portfolio turnover rate F | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 20%
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 12.91 | $ 13.14 | $ 13.00 | $ 12.25 | $ 11.80 | $ 10.61 |
Income from Investment Operations | ||||||
Net investment income (loss) D | .24 | .53 | .46 | .33 | .23 | .30 |
Net realized and unrealized gain (loss) | (.55) | .38 | .39 | .74 | .45 | 1.19 |
Total from investment operations | (.31) | .91 | .85 | 1.07 | .68 | 1.49 |
Distributions from net investment income | (.26) | (.55) | (.43) | (.32) | (.23) | (.30) |
Distributions from net realized gain | (.25) | (.59) | (.28) | - | - | - |
Total distributions | (.51) | (1.14) | (.71) | (.32) | (.23) | (.30) |
Net asset value, end of period | $ 12.09 | $ 12.91 | $ 13.14 | $ 13.00 | $ 12.25 | $ 11.80 |
Total Return B,C | (2.45)% | 7.26% | 6.77% | 8.85% | 5.80% | 14.26% |
Ratios to Average Net Assets F | ||||||
Expenses before reductions | .56% A | .57% | .58% | .60% | .63% | .64% |
Expenses net of fee waivers, if any | .56% A | .57% | .58% | .60% | .63% | .64% |
Expenses net of all reductions | .56% A | .57% | .57% | .58% | .61% | .61% |
Net investment income (loss) | 3.80% A | 4.15% | 3.58% | 2.64% | 1.86% | 2.69% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 2,463 | $ 2,509 | $ 2,131 | $ 1,724 | $ 1,395 | $ 971 |
Portfolio turnover rate E | 0% | 6% | 81% G | 81% G | 232% | 276% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 12.90 | $ 13.13 |
Income from Investment Operations | ||
Net investment income (loss) D | .24 | .53 |
Net realized and unrealized gain (loss) | (.54) | .38 |
Total from investment operations | (.30) | .91 |
Distributions from net investment income | (.26) | (.55) |
Distributions from net realized gain | (.25) | (.59) |
Total distributions | (.51) | (1.14) |
Net asset value, end of period | $ 12.09 | $ 12.90 |
Total Return B,C | (2.38)% | 7.24% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .56% A | .59% A |
Expenses net of fee waivers, if any | .56% A | .59% A |
Expenses net of all reductions | .56% A | .59% A |
Net investment income (loss) | 3.79% A | 4.13% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,984 | $ 248 |
Portfolio turnover rate E | 0% | 6% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 20% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 20% and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
Fidelity | Investment | Investment | Investment | Expense Ratio* |
Fidelity Equity Sector | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Fidelity Floating Rate | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income | Fidelity Investments Money Management, Inc. (FIMM) FIMM | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund
Semiannual Report
3. Significant Accounting Policies - continued
Expenses - continued
indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three year fiscal years remains subject to examination by the Internal Revenue Service. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and foreign currency transactions.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 30,446 | |
Unrealized depreciation | (87,911) | |
Net unrealized appreciation (depreciation) | $ (57,465) | |
Cost for federal income tax purposes | $ 2,537,717 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures
Semiannual Report
4. Operating Policies - continued
Futures Contracts - continued
contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $87,776 and $0, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .41% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 7 | $ 1 |
Class T | .25% | .25% | 10 | - |
Class B | .75% | .25% | 7 | 5 |
Class C | .75% | .25% | 11 | 6 |
$ 35 | $ 12 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 22 |
Class T | 3 |
Class B* | 1 |
Class C* | 1 |
$ 27 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 20% shares. For the period, each class paid the following transfer agent fees:
Amount | % of | |
Class A | $ 4 | .15 |
Class T | 3 | .15 |
Class B | 1 | .21 |
Class C | 2 | .18 |
Asset Manager 20% | 1,286 | .10 |
Institutional Class | 1 | .11 |
$ 1,297 |
* Annualized
Accounting Fees. FSC maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $3 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 20%'s operating expenses. During the period, this reimbursement reduced the class' expenses by $9.
Effective May 1, 2008 the expense limitation will be changed to .90%, 1.15%, 1.65%, 1.65% and .65% for Class A, T, B, C, and Institutional, respectively.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $11 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Asset Manager 20% | $ 23 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $81,877, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
Semiannual Report
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 104 | $ 40 |
Class T | 77 | 49 |
Class B | 20 | 12 |
Class C | 32 | 21 |
Asset Manager 20% | 52,251 | 97,126 |
Institutional Class | 40 | 7 |
Total | $ 52,524 | $ 97,255 |
From net realized gain | ||
Class A | $ 112 | $ 5 |
Class T | 89 | 20 |
Class B | 24 | 10 |
Class C | 35 | 9 |
Asset Manager 20% | 49,278 | 97,599 |
Institutional Class | 38 | 5 |
Total | $ 49,576 | $ 97,648 |
A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class A | ||||
Shares sold | 457 | 270 | $ 5,709 | $ 3,462 |
Reinvestment of distributions | 13 | 3 | 158 | 33 |
Shares redeemed | (114) | (8) | (1,416) | (106) |
Net increase (decrease) | 356 | 265 | $ 4,451 | $ 3,389 |
Class T | ||||
Shares sold | 119 | 314 | $ 1,475 | $ 4,039 |
Reinvestment of distributions | 12 | 5 | 152 | 64 |
Shares redeemed | (66) | (12) | (815) | (158) |
Net increase (decrease) | 65 | 307 | $ 812 | $ 3,945 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class B | ||||
Shares sold | 83 | 87 | $ 1,025 | $ 1,120 |
Reinvestment of distributions | 3 | 2 | 39 | 20 |
Shares redeemed | (14) | (12) | (176) | (149) |
Net increase (decrease) | 72 | 77 | $ 888 | $ 991 |
Class C | ||||
Shares sold | 134 | 138 | $ 1,649 | $ 1,774 |
Reinvestment of distributions | 4 | 2 | 46 | 22 |
Shares redeemed | (22) | (8) | (277) | (103) |
Net increase (decrease) | 116 | 132 | $ 1,418 | $ 1,693 |
Asset Manager 20% | ||||
Shares sold | 33,631 | 63,398 | $ 420,669 | $ 815,354 |
Reinvestment of distributions | 7,833 | 14,706 | 97,739 | 187,332 |
Shares redeemed | (32,222) | (45,832) | (402,452) | (589,696) |
Net increase (decrease) | 9,242 | 32,272 | $ 115,956 | $ 412,990 |
Institutional Class | ||||
Shares sold | 169 | 18 | $ 2,163 | $ 239 |
Reinvestment of distributions | 6 | 1 | 72 | 9 |
Shares redeemed | (30) | - | (366) | - |
Net increase (decrease) | 145 | 19 | $ 1,869 | $ 248 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Co. (FRAC)
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AAM20I-USAN-0508
1.834308.101
(Fidelity Investment logo)(registered trademark)
Fidelity
Asset Manager® 30%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, http://visit www.fidelity.com (search for "proxy voting guidelines") 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.
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/holdings or http://www.advisor.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 949.00 | $ 5.13B* |
HypotheticalA | $ 1,000.00 | $ 1,019.50 | $ 5.55C* |
Class T | |||
Actual | $ 1,000.00 | $ 947.00 | $ 6.28B* |
HypotheticalA | $ 1,000.00 | $ 1,018.25 | $ 6.81C* |
Class B | |||
Actual | $ 1,000.00 | $ 945.30 | $ 8.60B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32C* |
Class C | |||
Actual | $ 1,000.00 | $ 945.10 | $ 8.60B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32C* |
Asset Manager 30% | |||
Actual | $ 1,000.00 | $ 950.10 | $ 3.96B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29C* |
Institutional Class | |||
Actual | $ 1,000.00 | $ 949.80 | $ 3.96B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29C* |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio(shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.10%* |
Class T | 1.35%* |
Class B | 1.85%* |
Class C | 1.85%* |
Asset Manager 30% | .85%* |
Institutional Class | .85%* |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
*If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | .90% | |
Actual | $ 4.20 | |
HypotheticalA | $ 4.55 | |
Class T | 1.15% | |
Actual | $ 5.36 | |
HypotheticalA | $ 5.81 | |
Class B | 1.65% | |
Actual | $ 7.68 | |
HypotheticalA | $ 8.32 | |
Class C | 1.65% | |
Actual | $ 7.68 | |
HypotheticalA | $ 8.32 | |
Asset Manager 30% | .65% | |
Actual | $ 3.03 | |
HypotheticalA | $ 3.29 | |
Institutional Class | .65% | |
Actual | $ 3.03 | |
HypotheticalA | $ 3.29 |
A 5% return per year before expenses
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | |
(with maturities greater than one year) | % of fund's net assets |
Fannie Mae | 15.4 |
Freddie Mac | 5.4 |
U.S. Treasury Obligations | 5.0 |
Government National Mortgage Association | 1.8 |
Wells Fargo Mortgage Backed Securities Trust | 0.5 |
28.1 | |
Quality Diversification (% of fund's net assets) | |||
As of March 31, 2008 | |||
| U.S. Government and U.S. Government Agency | ||
 | AAA,AA,A 12.0% | ||
 | BBB 8.6% | ||
| BB and Below 4.6% | ||
 | Not Rated 0.4% | ||
 | Equities 30.2% | ||
| Short-Term Investments and Net Other Assets 16.4% | ||
We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.5 |
Procter & Gamble Co. | 0.5 |
Nintendo Co. Ltd. | 0.4 |
General Electric Co. | 0.3 |
JPMorgan Chase & Co. | 0.3 |
2.0 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class | ||
| Bond class 53.6% | ||
| Short-term class 16.2% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 4.8 |
Fidelity Information Technology Central Fund | 4.3 |
Fidelity Energy Central Fund | 3.7 |
Fidelity Industrials Central Fund | 3.6 |
Fidelity Health Care Central Fund | 3.3 |
Fidelity Consumer Discretionary Central Fund | 2.9 |
Fidelity Consumer Staples Central Fund | 2.9 |
Fidelity Materials Central Fund | 1.2 |
Fidelity Utilities Central Fund | 1.1 |
Fidelity Telecom Services Central Fund | 0.9 |
Total Equity Central Funds | 28.7 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 44.7 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 48.7 |
Money Market Central Funds | 20.0 |
Other Short-Term Investments and Net Other Assets | 2.6 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 10.2% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 28.7% | |||
Shares | Value | ||
Fidelity Consumer Discretionary Central Fund (c) | 8,903 | $ 901,963 | |
Fidelity Consumer Staples Central Fund (c) | 7,026 | 891,178 | |
Fidelity Energy Central Fund (c) | 8,003 | 1,153,072 | |
Fidelity Financials Central Fund (c) | 18,144 | 1,513,210 | |
Fidelity Health Care Central Fund (c) | 10,158 | 1,040,179 | |
Fidelity Industrials Central Fund (c) | 9,202 | 1,136,631 | |
Fidelity Information Technology Central Fund (c) | 11,605 | 1,350,358 | |
Fidelity Materials Central Fund (c) | 2,654 | 374,532 | |
Fidelity Telecom Services Central Fund (c) | 2,469 | 266,998 | |
Fidelity Utilities Central Fund (c) | 3,063 | 352,582 | |
TOTAL EQUITY CENTRAL FUNDS (Cost $9,318,698) | 8,980,703 | ||
Fixed-Income Central Funds - 48.7% | |||
High Yield Fixed-Income Funds - 4.0% | |||
Fidelity Floating Rate Central Fund (c) | 5,587 | 496,517 | |
Fidelity High Income Central Fund 1 (c) | 8,052 | 747,145 | |
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 1,243,662 | ||
Investment Grade Fixed-Income Funds - 44.7% | |||
Fidelity Tactical Income Central Fund (c) | 147,892 | 14,023,119 | |
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $15,569,474) | 15,266,781 | ||
Money Market Central Funds - 20.0% | |||
Fidelity Cash Central Fund, 2.69% (a) | 6,250,020 | 6,250,020 | |
U.S. Treasury Obligations - 0.1% | |||
Principal Amount | |||
U.S. Treasury Bills, yield at date of purchase 0.63% to 1.67% 4/10/08 to 6/5/08 (b) | $ 46,000 | 45,915 | |
Cash Equivalents - 2.3% | |||
Maturity Amount | Value | ||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 729,030 | $ 729,000 | |
TOTAL INVESTMENT PORTFOLIO - 99.8% (Cost $31,913,133) | 31,272,419 | ||
NET OTHER ASSETS - 0.2% | 54,812 | ||
NET ASSETS - 100% | $ 31,327,231 | ||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
12 S&P 500 E-Mini Index Contracts | June 2008 | $ 794,400 | $ 5,388 | ||
The face value of futures purchased as a percentage of net assets - 2.5% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $45,915. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$729,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 498,927 |
Barclays Capital, Inc. | 1,698 |
Lehman Brothers, Inc. | 228,375 |
$ 729,000 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 45,526 |
Fidelity Consumer Discretionary Central Fund | 4,006 |
Fidelity Consumer Staples Central Fund | 4,998 |
Fidelity Energy Central Fund | 2,204 |
Fidelity Financials Central Fund | 11,850 |
Fidelity Floating Rate Central Fund | 8,286 |
Fidelity Health Care Central Fund | 3,397 |
Fidelity High Income Central Fund 1 | 11,936 |
Fidelity Industrials Central Fund | 5,090 |
Fidelity Information Technology Central Fund | 3,442 |
Fidelity Materials Central Fund | 2,012 |
Fidelity Tactical Income Central Fund | 134,243 |
Fidelity Telecom Services Central Fund | 1,171 |
Fidelity Utilities Central Fund | 1,764 |
Total | $ 239,925 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales | Value, | % ownership, end of period |
Fidelity Consumer Discretionary Central Fund | $ - | $ 961,521 | $ 27,937 | $ 901,963 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 892,356 | 24,798 | 891,178 | 0.1% |
Fidelity Energy Central Fund | - | 1,126,176 | 31,242 | 1,153,072 | 0.1% |
Fidelity Financials Central Fund | - | 1,708,243 | 50,205 | 1,513,210 | 0.1% |
Fidelity Floating Rate Central Fund | - | 522,512 | - | 496,517 | 0.0% |
Fidelity Health Care Central Fund | - | 1,218,948 | 33,881 | 1,040,179 | 0.1% |
Fidelity High Income Central Fund 1 | - | 761,557 | - | 747,145 | 0.3% |
Fidelity Industrials Central Fund | - | 1,146,017 | 33,497 | 1,136,631 | 0.1% |
Fidelity Information Technology | - | 1,494,812 | 45,874 | 1,350,358 | 0.1% |
Fidelity Materials Central Fund | - | 368,633 | 10,398 | 374,532 | 0.1% |
Fidelity Tactical Income Central Fund | - | 14,285,404 | - | 14,023,119 | 0.3% |
Fidelity Telecom Services Central Fund | - | 306,704 | 9,122 | 266,998 | 0.1% |
Fidelity Utilities Central Fund | - | 384,935 | 10,638 | 352,582 | 0.1% |
Total | $ - | $ 25,177,818 | $ 277,592 | $ 24,247,484 |
Other Information |
The information in the following table is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 89.8% |
United Kingdom | 1.9% |
Bermuda | 1.2% |
Canada | 1.0% |
Others (individually less than 1%) | 6.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $729,000) - Unaffiliated issuers (cost $774,941) | $ 774,915 | |
Fidelity Central Funds (cost $31,138,192) | 30,497,504 | |
Total Investments (cost $31,913,133) | $ 31,272,419 | |
Cash | 705 | |
Receivable for fund shares sold | 65,650 | |
Distributions receivable from Fidelity Central Funds | 74,508 | |
Receivable for daily variation on futures contracts | 3,060 | |
Prepaid expenses | 38,325 | |
Receivable from investment adviser for expense reductions | 5,718 | |
Total assets | 31,460,385 | |
Liabilities | ||
Payable for investments purchased | $ 49,659 | |
Payable for fund shares redeemed | 52,993 | |
Accrued management fee | 10,347 | |
Distribution fees payable | 998 | |
Other affiliated payables | 3,553 | |
Other payables and accrued expenses | 15,604 | |
Total liabilities | 133,154 | |
Net Assets | $ 31,327,231 | |
Net Assets consist of: | ||
Paid in capital | $ 31,878,758 | |
Undistributed net investment income | 92,776 | |
Accumulated undistributed net realized gain (loss) on investments | (8,977) | |
Net unrealized appreciation (depreciation) on investments | (635,326) | |
Net Assets | $ 31,327,231 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price Class A: | $ 9.42 | |
Maximum offering price per share (100/94.25 of $9.42) | $ 9.99 | |
Class T: | $ 9.41 | |
Maximum offering price per share (100/96.50 of $9.41) | $ 9.75 | |
Class B: | $ 9.41 | |
Class C: | $ 9.40 | |
Asset Manager 30%: | $ 9.42 | |
Instutional Class: | $ 9.42 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 9,851 | |
Income from Fidelity Central Funds | 239,925 | |
Total income | 249,776 | |
Expenses | ||
Management fee | $ 28,288 | |
Transfer agent fees | 8,106 | |
Distribution fees | 3,107 | |
Accounting fees and expenses | 2,827 | |
Custodian fees and expenses | 2,489 | |
Independent trustees' compensation | 18 | |
Registration fees | 44,806 | |
Audit | 19,721 | |
Miscellaneous | 2,004 | |
Total expenses before reductions | 111,366 | |
Expense reductions | (52,643) | 58,723 |
Net investment income (loss) | 191,053 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (12,056) | |
Futures contracts | 3,079 | |
Total net realized gain (loss) | (8,977) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (640,714) | |
Futures contracts | 5,388 | |
Total change in net unrealized appreciation (depreciation) | (635,326) | |
Net gain (loss) | (644,303) | |
Net increase (decrease) in net assets resulting from operations | $ (453,250) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 191,053 |
Net realized gain (loss) | (8,977) |
Change in net unrealized appreciation (depreciation) | (635,326) |
Net increase (decrease) in net assets resulting from operations | (453,250) |
Distributions to shareholders from net investment income | (98,277) |
Share transactions - net increase (decrease) | 31,878,758 |
Total increase (decrease) in net assets | 31,327,231 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $92,776) | $ 31,327,231 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .12 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.51) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.42 |
Total Return B, C, D | (5.10)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 1.91% A |
Expenses net of fee waivers, if any | 1.10% A |
Expenses net of all reductions | 1.10% A |
Net investment income (loss) | 2.69% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 914 |
Portfolio turnover rate F | 2% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .11 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.53) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.41 |
Total Return B, C, D | (5.30)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.15% A |
Expenses net of fee waivers, if any | 1.35% A |
Expenses net of all reductions | 1.35% A |
Net investment income (loss) | 2.45% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 442 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.55) |
Distributions from net investment income | (.04) |
Net asset value, end of period | $ 9.41 |
Total Return B, C, D | (5.47)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.67% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.91% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 237 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.55) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.40 |
Total Return B, C, D | (5.49)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.70% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 2.01% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,070 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 30%
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.50) |
Distributions from net investment income | (.08) |
Net asset value, end of period | $ 9.42 |
Total Return B, C | (4.99)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.64% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .84% A |
Net investment income (loss) | 2.95% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 28,522 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.50) |
Distributions from net investment income | (.08) |
Net asset value, end of period | $ 9.42 |
Total Return B, C | (5.02)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.62% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.90% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 142 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 30% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 30%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to .02% |
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2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return.
Distributions are 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 162,807 | |
Unrealized depreciation | (803,521) | |
Net unrealized appreciation (depreciation) | $ (640,714) | |
Cost for federal income tax purposes | $ 31,913,133 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $25,177,818 and $277,592, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30%
of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .42% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 534 | $ 183 |
Class T | .25% | .25% | 426 | 342 |
Class B | .75% | .25% | 928 | 870 |
Class C | .75% | .25% | 1,219 | 1,183 |
$ 3,107 | $ 2,578 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 700 |
Class T | 178 |
Class C* | 162 |
$ 1,040 |
* When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 272 | .13 |
Class T | 104 | .12 |
Class B | 143 | .16 |
Class C | 151 | .13 |
Asset Manager 30% | 7,352 | .12 |
Institutional Class | 84 | .12 |
$ 8,106 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit - continued
pay commitment fees on its pro rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on the line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.10% | $ 1,675 |
Class T | 1.35% | 676 |
Class B | 1.85% | 755 |
Class C | 1.85% | 1,010 |
Asset Manager 30% | .85% | 47,945 |
Institutional Class | .85% | 541 |
$ 52,602 |
* Effective May 1, 2008 the expense limitation will be changed to 0.90%, 1.15%, 1.65%, 1.65%, 0.65% and 0.65% for Class A, Class T, Class B, Class C, Asset Manager 30%, and Institutional Class, respectively.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $41.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 2,619 |
Class T | 1,042 |
Class B | 838 |
Class C | 1,414 |
Asset Manager 30% | 91,161 |
Institutional Class | 1,203 |
Total | $ 98,277 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended March 31, | Six months ended March 31, | |
Class A | ||
Shares sold | 98,809 | $ 957,644 |
Reinvestment of distributions | 232 | 2,210 |
Shares redeemed | (1,949) | (18,600) |
Net increase (decrease) | 97,092 | $ 941,254 |
Class T | ||
Shares sold | 46,796 | $ 451,271 |
Reinvestment of distributions | 108 | 1,042 |
Net increase (decrease) | 46,904 | $ 452,313 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Shares | Dollars | |
Six months ended March 31, | Six months ended March 31, | |
Class B | ||
Shares sold | 25,163 | $ 248,451 |
Reinvestment of distributions | 87 | 838 |
Shares redeemed | (92) | (874) |
Net increase (decrease) | 25,158 | $ 248,415 |
Class C | ||
Shares sold | 116,242 | $ 1,105,210 |
Reinvestment of distributions | 149 | 1,414 |
Shares redeemed | (2,571) | (24,113) |
Net increase (decrease) | 113,820 | $ 1,082,511 |
Asset Manager 30% | ||
Shares sold | 3,465,406 | $ 33,217,584 |
Reinvestment of distributions | 9,125 | 86,491 |
Shares redeemed | (446,553) | (4,301,023) |
Net increase (decrease) | 3,027,978 | $ 29,003,052 |
Institutional Class | ||
Shares sold | 15,001 | $ 150,010 |
Reinvestment of distributions | 124 | 1,203 |
Net increase (decrease) | 15,125 | $ 151,213 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 30%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 30% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
(for the deaf and hearing impaired)
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
TAN-USAN-0508
1.849897.100
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager® 30% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
Class A, Class T, Class B,
and Class C are classes of
Fidelity Asset Manager® 30%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 949.00 | $ 5.13B* |
HypotheticalA | $ 1,000.00 | $ 1,019.50 | $ 5.55C* |
Class T | |||
Actual | $ 1,000.00 | $ 947.00 | $ 6.28B* |
HypotheticalA | $ 1,000.00 | $ 1,018.25 | $ 6.81C* |
Class B | |||
Actual | $ 1,000.00 | $ 945.30 | $ 8.60B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32C* |
Class C | |||
Actual | $ 1,000.00 | $ 945.10 | $ 8.60B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32C* |
Asset Manager 30% | |||
Actual | $ 1,000.00 | $ 950.10 | $ 3.96B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29C* |
Institutional Class | |||
Actual | $ 1,000.00 | $ 949.80 | $ 3.96B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29C* |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio(shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.10%* |
Class T | 1.35%* |
Class B | 1.85%* |
Class C | 1.85%* |
Asset Manager 30% | .85%* |
Institutional Class | .85%* |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
*If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | .90% | |
Actual | $ 4.20 | |
HypotheticalA | $ 4.55 | |
Class T | 1.15% | |
Actual | $ 5.36 | |
HypotheticalA | $ 5.81 | |
Class B | 1.65% | |
Actual | $ 7.68 | |
HypotheticalA | $ 8.32 | |
Class C | 1.65% | |
Actual | $ 7.68 | |
HypotheticalA | $ 8.32 | |
Asset Manager 30% | .65% | |
Actual | $ 3.03 | |
HypotheticalA | $ 3.29 | |
Institutional Class | .65% | |
Actual | $ 3.03 | |
HypotheticalA | $ 3.29 |
A 5% return per year before expenses
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | |
(with maturities greater than one year) | % of fund's net assets |
Fannie Mae | 15.4 |
Freddie Mac | 5.4 |
U.S. Treasury Obligations | 5.0 |
Government National Mortgage Association | 1.8 |
Wells Fargo Mortgage Backed Securities Trust | 0.5 |
28.1 | |
Quality Diversification (% of fund's net assets) | |||
As of March 31, 2008 | |||
 | U.S. Government and U.S. Government Agency | ||
| AAA,AA,A 12.0% | ||
| BBB 8.6% | ||
| BB and Below 4.6% | ||
| Not Rated 0.4% | ||
| Equities 30.2% | ||
| Short-Term Investments and Net Other Assets 16.4% | ||
We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.5 |
Procter & Gamble Co. | 0.5 |
Nintendo Co. Ltd. | 0.4 |
General Electric Co. | 0.3 |
JPMorgan Chase & Co. | 0.3 |
2.0 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class | ||
| Bond class 53.6% | ||
| Short-term class 16.2% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 4.8 |
Fidelity Information Technology Central Fund | 4.3 |
Fidelity Energy Central Fund | 3.7 |
Fidelity Industrials Central Fund | 3.6 |
Fidelity Health Care Central Fund | 3.3 |
Fidelity Consumer Discretionary Central Fund | 2.9 |
Fidelity Consumer Staples Central Fund | 2.9 |
Fidelity Materials Central Fund | 1.2 |
Fidelity Utilities Central Fund | 1.1 |
Fidelity Telecom Services Central Fund | 0.9 |
Total Equity Central Funds | 28.7 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 44.7 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 48.7 |
Money Market Central Funds | 20.0 |
Other Short-Term Investments and Net Other Assets | 2.6 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 10.2% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 28.7% | |||
Shares | Value | ||
Fidelity Consumer Discretionary Central Fund (c) | 8,903 | $ 901,963 | |
Fidelity Consumer Staples Central Fund (c) | 7,026 | 891,178 | |
Fidelity Energy Central Fund (c) | 8,003 | 1,153,072 | |
Fidelity Financials Central Fund (c) | 18,144 | 1,513,210 | |
Fidelity Health Care Central Fund (c) | 10,158 | 1,040,179 | |
Fidelity Industrials Central Fund (c) | 9,202 | 1,136,631 | |
Fidelity Information Technology Central Fund (c) | 11,605 | 1,350,358 | |
Fidelity Materials Central Fund (c) | 2,654 | 374,532 | |
Fidelity Telecom Services Central Fund (c) | 2,469 | 266,998 | |
Fidelity Utilities Central Fund (c) | 3,063 | 352,582 | |
TOTAL EQUITY CENTRAL FUNDS (Cost $9,318,698) | 8,980,703 | ||
Fixed-Income Central Funds - 48.7% | |||
High Yield Fixed-Income Funds - 4.0% | |||
Fidelity Floating Rate Central Fund (c) | 5,587 | 496,517 | |
Fidelity High Income Central Fund 1 (c) | 8,052 | 747,145 | |
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 1,243,662 | ||
Investment Grade Fixed-Income Funds - 44.7% | |||
Fidelity Tactical Income Central Fund (c) | 147,892 | 14,023,119 | |
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $15,569,474) | 15,266,781 | ||
Money Market Central Funds - 20.0% | |||
Fidelity Cash Central Fund, 2.69% (a) | 6,250,020 | 6,250,020 | |
U.S. Treasury Obligations - 0.1% | |||
Principal Amount | |||
U.S. Treasury Bills, yield at date of purchase 0.63% to 1.67% 4/10/08 to 6/5/08 (b) | $ 46,000 | 45,915 | |
Cash Equivalents - 2.3% | |||
Maturity Amount | Value | ||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 729,030 | $ 729,000 | |
TOTAL INVESTMENT PORTFOLIO - 99.8% (Cost $31,913,133) | 31,272,419 | ||
NET OTHER ASSETS - 0.2% | 54,812 | ||
NET ASSETS - 100% | $ 31,327,231 | ||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
12 S&P 500 E-Mini Index Contracts | June 2008 | $ 794,400 | $ 5,388 | ||
The face value of futures purchased as a percentage of net assets - 2.5% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $45,915. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$729,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 498,927 |
Barclays Capital, Inc. | 1,698 |
Lehman Brothers, Inc. | 228,375 |
$ 729,000 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 45,526 |
Fidelity Consumer Discretionary Central Fund | 4,006 |
Fidelity Consumer Staples Central Fund | 4,998 |
Fidelity Energy Central Fund | 2,204 |
Fidelity Financials Central Fund | 11,850 |
Fidelity Floating Rate Central Fund | 8,286 |
Fidelity Health Care Central Fund | 3,397 |
Fidelity High Income Central Fund 1 | 11,936 |
Fidelity Industrials Central Fund | 5,090 |
Fidelity Information Technology Central Fund | 3,442 |
Fidelity Materials Central Fund | 2,012 |
Fidelity Tactical Income Central Fund | 134,243 |
Fidelity Telecom Services Central Fund | 1,171 |
Fidelity Utilities Central Fund | 1,764 |
Total | $ 239,925 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales | Value, | % ownership, end of period |
Fidelity Consumer Discretionary Central Fund | $ - | $ 961,521 | $ 27,937 | $ 901,963 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 892,356 | 24,798 | 891,178 | 0.1% |
Fidelity Energy Central Fund | - | 1,126,176 | 31,242 | 1,153,072 | 0.1% |
Fidelity Financials Central Fund | - | 1,708,243 | 50,205 | 1,513,210 | 0.1% |
Fidelity Floating Rate Central Fund | - | 522,512 | - | 496,517 | 0.0% |
Fidelity Health Care Central Fund | - | 1,218,948 | 33,881 | 1,040,179 | 0.1% |
Fidelity High Income Central Fund 1 | - | 761,557 | - | 747,145 | 0.3% |
Fidelity Industrials Central Fund | - | 1,146,017 | 33,497 | 1,136,631 | 0.1% |
Fidelity Information Technology | - | 1,494,812 | 45,874 | 1,350,358 | 0.1% |
Fidelity Materials Central Fund | - | 368,633 | 10,398 | 374,532 | 0.1% |
Fidelity Tactical Income Central Fund | - | 14,285,404 | - | 14,023,119 | 0.3% |
Fidelity Telecom Services Central Fund | - | 306,704 | 9,122 | 266,998 | 0.1% |
Fidelity Utilities Central Fund | - | 384,935 | 10,638 | 352,582 | 0.1% |
Total | $ - | $ 25,177,818 | $ 277,592 | $ 24,247,484 |
Other Information |
The information in the following table is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 89.8% |
United Kingdom | 1.9% |
Bermuda | 1.2% |
Canada | 1.0% |
Others (individually less than 1%) | 6.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $729,000) - Unaffiliated issuers (cost $774,941) | $ 774,915 | |
Fidelity Central Funds (cost $31,138,192) | 30,497,504 | |
Total Investments (cost $31,913,133) | $ 31,272,419 | |
Cash | 705 | |
Receivable for fund shares sold | 65,650 | |
Distributions receivable from Fidelity Central Funds | 74,508 | |
Receivable for daily variation on futures contracts | 3,060 | |
Prepaid expenses | 38,325 | |
Receivable from investment adviser for expense reductions | 5,718 | |
Total assets | 31,460,385 | |
Liabilities | ||
Payable for investments purchased | $ 49,659 | |
Payable for fund shares redeemed | 52,993 | |
Accrued management fee | 10,347 | |
Distribution fees payable | 998 | |
Other affiliated payables | 3,553 | |
Other payables and accrued expenses | 15,604 | |
Total liabilities | 133,154 | |
Net Assets | $ 31,327,231 | |
Net Assets consist of: | ||
Paid in capital | $ 31,878,758 | |
Undistributed net investment income | 92,776 | |
Accumulated undistributed net realized gain (loss) on investments | (8,977) | |
Net unrealized appreciation (depreciation) on investments | (635,326) | |
Net Assets | $ 31,327,231 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price Class A: | $ 9.42 | |
Maximum offering price per share (100/94.25 of $9.42) | $ 9.99 | |
Class T: | $ 9.41 | |
Maximum offering price per share (100/96.50 of $9.41) | $ 9.75 | |
Class B: | $ 9.41 | |
Class C: | $ 9.40 | |
Asset Manager 30%: | $ 9.42 | |
Instutional Class: | $ 9.42 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 9,851 | |
Income from Fidelity Central Funds | 239,925 | |
Total income | 249,776 | |
Expenses | ||
Management fee | $ 28,288 | |
Transfer agent fees | 8,106 | |
Distribution fees | 3,107 | |
Accounting fees and expenses | 2,827 | |
Custodian fees and expenses | 2,489 | |
Independent trustees' compensation | 18 | |
Registration fees | 44,806 | |
Audit | 19,721 | |
Miscellaneous | 2,004 | |
Total expenses before reductions | 111,366 | |
Expense reductions | (52,643) | 58,723 |
Net investment income (loss) | 191,053 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (12,056) | |
Futures contracts | 3,079 | |
Total net realized gain (loss) | (8,977) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (640,714) | |
Futures contracts | 5,388 | |
Total change in net unrealized appreciation (depreciation) | (635,326) | |
Net gain (loss) | (644,303) | |
Net increase (decrease) in net assets resulting from operations | $ (453,250) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 191,053 |
Net realized gain (loss) | (8,977) |
Change in net unrealized appreciation (depreciation) | (635,326) |
Net increase (decrease) in net assets resulting from operations | (453,250) |
Distributions to shareholders from net investment income | (98,277) |
Share transactions - net increase (decrease) | 31,878,758 |
Total increase (decrease) in net assets | 31,327,231 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $92,776) | $ 31,327,231 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .12 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.51) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.42 |
Total Return B, C, D | (5.10)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 1.91% A |
Expenses net of fee waivers, if any | 1.10% A |
Expenses net of all reductions | 1.10% A |
Net investment income (loss) | 2.69% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 914 |
Portfolio turnover rate F | 2% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .11 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.53) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.41 |
Total Return B, C, D | (5.30)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.15% A |
Expenses net of fee waivers, if any | 1.35% A |
Expenses net of all reductions | 1.35% A |
Net investment income (loss) | 2.45% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 442 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.55) |
Distributions from net investment income | (.04) |
Net asset value, end of period | $ 9.41 |
Total Return B, C, D | (5.47)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.67% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.91% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 237 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.55) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.40 |
Total Return B, C, D | (5.49)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.70% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 2.01% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,070 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 30%
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.50) |
Distributions from net investment income | (.08) |
Net asset value, end of period | $ 9.42 |
Total Return B, C | (4.99)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.64% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .84% A |
Net investment income (loss) | 2.95% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 28,522 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.50) |
Distributions from net investment income | (.08) |
Net asset value, end of period | $ 9.42 |
Total Return B, C | (5.02)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.62% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.90% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 142 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 30% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 30%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to .02% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return.
Distributions are 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 162,807 | |
Unrealized depreciation | (803,521) | |
Net unrealized appreciation (depreciation) | $ (640,714) | |
Cost for federal income tax purposes | $ 31,913,133 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $25,177,818 and $277,592, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30%
of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .42% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 534 | $ 183 |
Class T | .25% | .25% | 426 | 342 |
Class B | .75% | .25% | 928 | 870 |
Class C | .75% | .25% | 1,219 | 1,183 |
$ 3,107 | $ 2,578 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 700 |
Class T | 178 |
Class C* | 162 |
$ 1,040 |
* When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 272 | .13 |
Class T | 104 | .12 |
Class B | 143 | .16 |
Class C | 151 | .13 |
Asset Manager 30% | 7,352 | .12 |
Institutional Class | 84 | .12 |
$ 8,106 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit - continued
pay commitment fees on its pro rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on the line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.10% | $ 1,675 |
Class T | 1.35% | 676 |
Class B | 1.85% | 755 |
Class C | 1.85% | 1,010 |
Asset Manager 30% | .85% | 47,945 |
Institutional Class | .85% | 541 |
$ 52,602 |
* Effective May 1, 2008 the expense limitation will be changed to 0.90%, 1.15%, 1.65%, 1.65%, 0.65% and 0.65% for Class A, Class T, Class B,
Class C, Asset Manager 30%, and Institutional Class, respectively.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $41.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 2,619 |
Class T | 1,042 |
Class B | 838 |
Class C | 1,414 |
Asset Manager 30% | 91,161 |
Institutional Class | 1,203 |
Total | $ 98,277 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended March 31, | Six months ended March 31, | |
Class A | ||
Shares sold | 98,809 | $ 957,644 |
Reinvestment of distributions | 232 | 2,210 |
Shares redeemed | (1,949) | (18,600) |
Net increase (decrease) | 97,092 | $ 941,254 |
Class T | ||
Shares sold | 46,796 | $ 451,271 |
Reinvestment of distributions | 108 | 1,042 |
Net increase (decrease) | 46,904 | $ 452,313 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Shares | Dollars | |
Six months ended March 31, | Six months ended March 31, | |
Class B | ||
Shares sold | 25,163 | $ 248,451 |
Reinvestment of distributions | 87 | 838 |
Shares redeemed | (92) | (874) |
Net increase (decrease) | 25,158 | $ 248,415 |
Class C | ||
Shares sold | 116,242 | $ 1,105,210 |
Reinvestment of distributions | 149 | 1,414 |
Shares redeemed | (2,571) | (24,113) |
Net increase (decrease) | 113,820 | $ 1,082,511 |
Asset Manager 30% | ||
Shares sold | 3,465,406 | $ 33,217,584 |
Reinvestment of distributions | 9,125 | 86,491 |
Shares redeemed | (446,553) | (4,301,023) |
Net increase (decrease) | 3,027,978 | $ 29,003,052 |
Institutional Class | ||
Shares sold | 15,001 | $ 150,010 |
Reinvestment of distributions | 124 | 1,203 |
Net increase (decrease) | 15,125 | $ 151,213 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 30%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 30% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
ATAN-USAN-0508
1.849936.100
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager® 30% -
Institutional Class
Semiannual Report
March 31, 2008
Institutional Class is a class of
Fidelity Asset Manager® 30%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 949.00 | $ 5.13B* |
HypotheticalA | $ 1,000.00 | $ 1,019.50 | $ 5.55C* |
Class T | |||
Actual | $ 1,000.00 | $ 947.00 | $ 6.28B* |
HypotheticalA | $ 1,000.00 | $ 1,018.25 | $ 6.81C* |
Class B | |||
Actual | $ 1,000.00 | $ 945.30 | $ 8.60B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32C* |
Class C | |||
Actual | $ 1,000.00 | $ 945.10 | $ 8.60B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32C* |
Asset Manager 30% | |||
Actual | $ 1,000.00 | $ 950.10 | $ 3.96B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29C* |
Institutional Class | |||
Actual | $ 1,000.00 | $ 949.80 | $ 3.96B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29C* |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio(shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.10%* |
Class T | 1.35%* |
Class B | 1.85%* |
Class C | 1.85%* |
Asset Manager 30% | .85%* |
Institutional Class | .85%* |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
*If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | .90% | |
Actual | $ 4.20 | |
HypotheticalA | $ 4.55 | |
Class T | 1.15% | |
Actual | $ 5.36 | |
HypotheticalA | $ 5.81 | |
Class B | 1.65% | |
Actual | $ 7.68 | |
HypotheticalA | $ 8.32 | |
Class C | 1.65% | |
Actual | $ 7.68 | |
HypotheticalA | $ 8.32 | |
Asset Manager 30% | .65% | |
Actual | $ 3.03 | |
HypotheticalA | $ 3.29 | |
Institutional Class | .65% | |
Actual | $ 3.03 | |
HypotheticalA | $ 3.29 |
A 5% return per year before expenses
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | |
(with maturities greater than one year) | % of fund's net assets |
Fannie Mae | 15.4 |
Freddie Mac | 5.4 |
U.S. Treasury Obligations | 5.0 |
Government National Mortgage Association | 1.8 |
Wells Fargo Mortgage Backed Securities Trust | 0.5 |
28.1 | |
Quality Diversification (% of fund's net assets) | |||
As of March 31, 2008 | |||
| U.S. Government and U.S. Government Agency | ||
| AAA,AA,A 12.0% | ||
| BBB 8.6% | ||
| BB and Below 4.6% | ||
| Not Rated 0.4% | ||
| Equities 30.2% | ||
| Short-Term Investments and Net Other Assets 16.4% | ||
We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.5 |
Procter & Gamble Co. | 0.5 |
Nintendo Co. Ltd. | 0.4 |
General Electric Co. | 0.3 |
JPMorgan Chase & Co. | 0.3 |
2.0 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class | ||
| Bond class 53.6% | ||
| Short-term class 16.2% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 4.8 |
Fidelity Information Technology Central Fund | 4.3 |
Fidelity Energy Central Fund | 3.7 |
Fidelity Industrials Central Fund | 3.6 |
Fidelity Health Care Central Fund | 3.3 |
Fidelity Consumer Discretionary Central Fund | 2.9 |
Fidelity Consumer Staples Central Fund | 2.9 |
Fidelity Materials Central Fund | 1.2 |
Fidelity Utilities Central Fund | 1.1 |
Fidelity Telecom Services Central Fund | 0.9 |
Total Equity Central Funds | 28.7 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 44.7 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 48.7 |
Money Market Central Funds | 20.0 |
Other Short-Term Investments and Net Other Assets | 2.6 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 10.2% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 28.7% | |||
Shares | Value | ||
Fidelity Consumer Discretionary Central Fund (c) | 8,903 | $ 901,963 | |
Fidelity Consumer Staples Central Fund (c) | 7,026 | 891,178 | |
Fidelity Energy Central Fund (c) | 8,003 | 1,153,072 | |
Fidelity Financials Central Fund (c) | 18,144 | 1,513,210 | |
Fidelity Health Care Central Fund (c) | 10,158 | 1,040,179 | |
Fidelity Industrials Central Fund (c) | 9,202 | 1,136,631 | |
Fidelity Information Technology Central Fund (c) | 11,605 | 1,350,358 | |
Fidelity Materials Central Fund (c) | 2,654 | 374,532 | |
Fidelity Telecom Services Central Fund (c) | 2,469 | 266,998 | |
Fidelity Utilities Central Fund (c) | 3,063 | 352,582 | |
TOTAL EQUITY CENTRAL FUNDS (Cost $9,318,698) | 8,980,703 | ||
Fixed-Income Central Funds - 48.7% | |||
High Yield Fixed-Income Funds - 4.0% | |||
Fidelity Floating Rate Central Fund (c) | 5,587 | 496,517 | |
Fidelity High Income Central Fund 1 (c) | 8,052 | 747,145 | |
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 1,243,662 | ||
Investment Grade Fixed-Income Funds - 44.7% | |||
Fidelity Tactical Income Central Fund (c) | 147,892 | 14,023,119 | |
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $15,569,474) | 15,266,781 | ||
Money Market Central Funds - 20.0% | |||
Fidelity Cash Central Fund, 2.69% (a) | 6,250,020 | 6,250,020 | |
U.S. Treasury Obligations - 0.1% | |||
Principal Amount | |||
U.S. Treasury Bills, yield at date of purchase 0.63% to 1.67% 4/10/08 to 6/5/08 (b) | $ 46,000 | 45,915 | |
Cash Equivalents - 2.3% | |||
Maturity Amount | Value | ||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 729,030 | $ 729,000 | |
TOTAL INVESTMENT PORTFOLIO - 99.8% (Cost $31,913,133) | 31,272,419 | ||
NET OTHER ASSETS - 0.2% | 54,812 | ||
NET ASSETS - 100% | $ 31,327,231 | ||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
12 S&P 500 E-Mini Index Contracts | June 2008 | $ 794,400 | $ 5,388 | ||
The face value of futures purchased as a percentage of net assets - 2.5% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $45,915. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$729,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 498,927 |
Barclays Capital, Inc. | 1,698 |
Lehman Brothers, Inc. | 228,375 |
$ 729,000 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 45,526 |
Fidelity Consumer Discretionary Central Fund | 4,006 |
Fidelity Consumer Staples Central Fund | 4,998 |
Fidelity Energy Central Fund | 2,204 |
Fidelity Financials Central Fund | 11,850 |
Fidelity Floating Rate Central Fund | 8,286 |
Fidelity Health Care Central Fund | 3,397 |
Fidelity High Income Central Fund 1 | 11,936 |
Fidelity Industrials Central Fund | 5,090 |
Fidelity Information Technology Central Fund | 3,442 |
Fidelity Materials Central Fund | 2,012 |
Fidelity Tactical Income Central Fund | 134,243 |
Fidelity Telecom Services Central Fund | 1,171 |
Fidelity Utilities Central Fund | 1,764 |
Total | $ 239,925 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales | Value, | % ownership, end of period |
Fidelity Consumer Discretionary Central Fund | $ - | $ 961,521 | $ 27,937 | $ 901,963 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 892,356 | 24,798 | 891,178 | 0.1% |
Fidelity Energy Central Fund | - | 1,126,176 | 31,242 | 1,153,072 | 0.1% |
Fidelity Financials Central Fund | - | 1,708,243 | 50,205 | 1,513,210 | 0.1% |
Fidelity Floating Rate Central Fund | - | 522,512 | - | 496,517 | 0.0% |
Fidelity Health Care Central Fund | - | 1,218,948 | 33,881 | 1,040,179 | 0.1% |
Fidelity High Income Central Fund 1 | - | 761,557 | - | 747,145 | 0.3% |
Fidelity Industrials Central Fund | - | 1,146,017 | 33,497 | 1,136,631 | 0.1% |
Fidelity Information Technology | - | 1,494,812 | 45,874 | 1,350,358 | 0.1% |
Fidelity Materials Central Fund | - | 368,633 | 10,398 | 374,532 | 0.1% |
Fidelity Tactical Income Central Fund | - | 14,285,404 | - | 14,023,119 | 0.3% |
Fidelity Telecom Services Central Fund | - | 306,704 | 9,122 | 266,998 | 0.1% |
Fidelity Utilities Central Fund | - | 384,935 | 10,638 | 352,582 | 0.1% |
Total | $ - | $ 25,177,818 | $ 277,592 | $ 24,247,484 |
Other Information |
The information in the following table is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 89.8% |
United Kingdom | 1.9% |
Bermuda | 1.2% |
Canada | 1.0% |
Others (individually less than 1%) | 6.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $729,000) - Unaffiliated issuers (cost $774,941) | $ 774,915 | |
Fidelity Central Funds (cost $31,138,192) | 30,497,504 | |
Total Investments (cost $31,913,133) | $ 31,272,419 | |
Cash | 705 | |
Receivable for fund shares sold | 65,650 | |
Distributions receivable from Fidelity Central Funds | 74,508 | |
Receivable for daily variation on futures contracts | 3,060 | |
Prepaid expenses | 38,325 | |
Receivable from investment adviser for expense reductions | 5,718 | |
Total assets | 31,460,385 | |
Liabilities | ||
Payable for investments purchased | $ 49,659 | |
Payable for fund shares redeemed | 52,993 | |
Accrued management fee | 10,347 | |
Distribution fees payable | 998 | |
Other affiliated payables | 3,553 | |
Other payables and accrued expenses | 15,604 | |
Total liabilities | 133,154 | |
Net Assets | $ 31,327,231 | |
Net Assets consist of: | ||
Paid in capital | $ 31,878,758 | |
Undistributed net investment income | 92,776 | |
Accumulated undistributed net realized gain (loss) on investments | (8,977) | |
Net unrealized appreciation (depreciation) on investments | (635,326) | |
Net Assets | $ 31,327,231 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price Class A: | $ 9.42 | |
Maximum offering price per share (100/94.25 of $9.42) | $ 9.99 | |
Class T: | $ 9.41 | |
Maximum offering price per share (100/96.50 of $9.41) | $ 9.75 | |
Class B: | $ 9.41 | |
Class C: | $ 9.40 | |
Asset Manager 30%: | $ 9.42 | |
Instutional Class: | $ 9.42 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 9,851 | |
Income from Fidelity Central Funds | 239,925 | |
Total income | 249,776 | |
Expenses | ||
Management fee | $ 28,288 | |
Transfer agent fees | 8,106 | |
Distribution fees | 3,107 | |
Accounting fees and expenses | 2,827 | |
Custodian fees and expenses | 2,489 | |
Independent trustees' compensation | 18 | |
Registration fees | 44,806 | |
Audit | 19,721 | |
Miscellaneous | 2,004 | |
Total expenses before reductions | 111,366 | |
Expense reductions | (52,643) | 58,723 |
Net investment income (loss) | 191,053 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (12,056) | |
Futures contracts | 3,079 | |
Total net realized gain (loss) | (8,977) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (640,714) | |
Futures contracts | 5,388 | |
Total change in net unrealized appreciation (depreciation) | (635,326) | |
Net gain (loss) | (644,303) | |
Net increase (decrease) in net assets resulting from operations | $ (453,250) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 191,053 |
Net realized gain (loss) | (8,977) |
Change in net unrealized appreciation (depreciation) | (635,326) |
Net increase (decrease) in net assets resulting from operations | (453,250) |
Distributions to shareholders from net investment income | (98,277) |
Share transactions - net increase (decrease) | 31,878,758 |
Total increase (decrease) in net assets | 31,327,231 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $92,776) | $ 31,327,231 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .12 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.51) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.42 |
Total Return B, C, D | (5.10)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 1.91% A |
Expenses net of fee waivers, if any | 1.10% A |
Expenses net of all reductions | 1.10% A |
Net investment income (loss) | 2.69% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 914 |
Portfolio turnover rate F | 2% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .11 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.53) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.41 |
Total Return B, C, D | (5.30)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.15% A |
Expenses net of fee waivers, if any | 1.35% A |
Expenses net of all reductions | 1.35% A |
Net investment income (loss) | 2.45% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 442 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.55) |
Distributions from net investment income | (.04) |
Net asset value, end of period | $ 9.41 |
Total Return B, C, D | (5.47)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.67% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.91% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 237 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.64) |
Total from investment operations | (.55) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.40 |
Total Return B, C, D | (5.49)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.70% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 2.01% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,070 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 30%
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.50) |
Distributions from net investment income | (.08) |
Net asset value, end of period | $ 9.42 |
Total Return B, C | (4.99)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.64% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .84% A |
Net investment income (loss) | 2.95% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 28,522 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.63) |
Total from investment operations | (.50) |
Distributions from net investment income | (.08) |
Net asset value, end of period | $ 9.42 |
Total Return B, C | (5.02)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.62% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.90% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 142 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 30% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 30%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to .02% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return.
Distributions are 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 162,807 | |
Unrealized depreciation | (803,521) | |
Net unrealized appreciation (depreciation) | $ (640,714) | |
Cost for federal income tax purposes | $ 31,913,133 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $25,177,818 and $277,592, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30%
of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .42% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 534 | $ 183 |
Class T | .25% | .25% | 426 | 342 |
Class B | .75% | .25% | 928 | 870 |
Class C | .75% | .25% | 1,219 | 1,183 |
$ 3,107 | $ 2,578 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 700 |
Class T | 178 |
Class C* | 162 |
$ 1,040 |
* When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 272 | .13 |
Class T | 104 | .12 |
Class B | 143 | .16 |
Class C | 151 | .13 |
Asset Manager 30% | 7,352 | .12 |
Institutional Class | 84 | .12 |
$ 8,106 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit - continued
pay commitment fees on its pro rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on the line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.10% | $ 1,675 |
Class T | 1.35% | 676 |
Class B | 1.85% | 755 |
Class C | 1.85% | 1,010 |
Asset Manager 30% | .85% | 47,945 |
Institutional Class | .85% | 541 |
$ 52,602 |
* Effective May 1, 2008 the expense limitation will be changed to 0.90%, 1.15%, 1.65%, 1.65%, 0.65% and 0.65% for Class A, Class T, Class B, Class C, Asset Manager 30%, and Institutional Class, respectively.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $41.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 2,619 |
Class T | 1,042 |
Class B | 838 |
Class C | 1,414 |
Asset Manager 30% | 91,161 |
Institutional Class | 1,203 |
Total | $ 98,277 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended March 31, | Six months ended March 31, | |
Class A | ||
Shares sold | 98,809 | $ 957,644 |
Reinvestment of distributions | 232 | 2,210 |
Shares redeemed | (1,949) | (18,600) |
Net increase (decrease) | 97,092 | $ 941,254 |
Class T | ||
Shares sold | 46,796 | $ 451,271 |
Reinvestment of distributions | 108 | 1,042 |
Net increase (decrease) | 46,904 | $ 452,313 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Shares | Dollars | |
Six months ended March 31, | Six months ended March 31, | |
Class B | ||
Shares sold | 25,163 | $ 248,451 |
Reinvestment of distributions | 87 | 838 |
Shares redeemed | (92) | (874) |
Net increase (decrease) | 25,158 | $ 248,415 |
Class C | ||
Shares sold | 116,242 | $ 1,105,210 |
Reinvestment of distributions | 149 | 1,414 |
Shares redeemed | (2,571) | (24,113) |
Net increase (decrease) | 113,820 | $ 1,082,511 |
Asset Manager 30% | ||
Shares sold | 3,465,406 | $ 33,217,584 |
Reinvestment of distributions | 9,125 | 86,491 |
Shares redeemed | (446,553) | (4,301,023) |
Net increase (decrease) | 3,027,978 | $ 29,003,052 |
Institutional Class | ||
Shares sold | 15,001 | $ 150,010 |
Reinvestment of distributions | 124 | 1,203 |
Net increase (decrease) | 15,125 | $ 151,213 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 30%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 30% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
ATANI-USAN-0508
1.849926.100
(Fidelity Investment logo)(registered trademark)
Fidelity
Asset Manager® 40%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, http://visit www.fidelity.com (search for "proxy voting guidelines") 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.
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/holdings or http://www.advisor.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 929.90 | $ 5.08 B* |
HypotheticalA | $ 1,000.00 | $ 1,019.50 | $ 5.55 C* |
Class T | |||
Actual | $ 1,000.00 | $ 929.30 | $ 6.23 B* |
HypotheticalA | $ 1,000.00 | $ 1,018.25 | $ 6.81 C* |
Class B | |||
Actual | $ 1,000.00 | $ 927.30 | $ 8.52 B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32 C* |
Class C | |||
Actual | $ 1,000.00 | $ 927.30 | $ 8.52 B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32 C* |
Asset Manager 40% | |||
Actual | $ 1,000.00 | $ 931.40 | $ 3.92 B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29 C* |
Institutional Class | |||
Actual | $ 1,000.00 | $ 931.40 | $ 3.92 B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29 C* |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.10%* |
Class T | 1.35%* |
Class B | 1.85%* |
Class C | 1.85%* |
Asset Manager 40% | .85%* |
Institutional Class | .85%* |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
* If changes to voluntary expense limitations, effective May 1, 2008 for all classes had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | 90% | |
Actual | $ 4.15 | |
HypotheticalA | $ 4.55 | |
Class T | 1.15% | |
Actual | $ 5.31 | |
HypotheticalA | $ 5.81 | |
Class B | 1.65% | |
Actual | $ 7.61 | |
HypotheticalA | $ 8.32 | |
Class C | 1.65% | |
Actual | $ 7.61 | |
HypotheticalA | $ 8.32 | |
Asset Manager 40% | .65% | |
Actual | $ 3.00 | |
HypotheticalA | $ 3.29 | |
Institutional Class | .65% | |
Actual | $ 3.00 | |
HypotheticalA | $ 3.29 |
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | |
(with maturities greater than one year) | % of fund's |
Fannie Mae | 14.1 |
Freddie Mac | 4.9 |
U.S. Treasury Obligations | 4.6 |
Government National Mortgage Association | 1.6 |
Wells Fargo Mortgage Backed Securities Trust | 0.4 |
25.6 | |
Quality Diversification (% of fund's net assets) | |||
As of March 31, 2008 | |||
| U.S. Government and | ||
 | AAA,AA,A 10.8% | ||
| BBB 8.0% | ||
 | BB 2.9% | ||
 | B 1.3% | ||
| CCC,CC,C 0.3% | ||
 | Not Rated 0.4% | ||
 | Equities 40.9% | ||
| Short-Term Investments and | ||
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent down-grades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.6 |
Procter & Gamble Co. | 0.6 |
Nintendo Co. Ltd. | 0.4 |
General Electric Co. | 0.4 |
JPMorgan Chase & Co. | 0.4 |
2.4 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class and Equity Futures 41.0% | ||
| Bond class 49.4% | ||
| Short-term class 9.6% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 6.1 |
Fidelity Information Technology Central Fund | 5.5 |
Fidelity Energy Central Fund | 4.7 |
Fidelity Industrials Central Fund | 4.6 |
Fidelity Health Care Central Fund | 4.2 |
Fidelity International Equity Central Fund | 3.9 |
Fidelity Consumer Discretionary Central Fund | 3.7 |
Fidelity Consumer Staples Central Fund | 3.6 |
Fidelity Materials Central Fund | 1.5 |
Fidelity Utilities Central Fund | 1.4 |
Fidelity Telecom Services Central Fund | 1.1 |
Total Equity Central Funds | 40.3 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 41.0 |
High Yield Fixed-Income Funds | 3.9 |
Total Fixed-Income Central Funds | 44.9 |
Money Market Central Funds | 14.1 |
Other Short-Term Investments and Net Other Assets | 0.7 |
Total | 100.0 |
At period end, investments in foreign securities, including the Fund's pro-rata share of the underlying Central Funds, was 14.0% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 40.3% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 5,380 | $ 545,048 | ||
Fidelity Consumer Staples Central Fund (c) | 4,245 | 538,436 | ||
Fidelity Energy Central Fund (c) | 4,836 | 696,771 | ||
Fidelity Financials Central Fund (c) | 10,964 | 914,398 | ||
Fidelity Health Care Central Fund (c) | 6,138 | 628,531 | ||
Fidelity Industrials Central Fund (c) | 5,561 | 686,895 | ||
Fidelity Information Technology Central Fund (c) | 7,013 | 816,033 | ||
Fidelity International Equity Central Fund (c) | 6,861 | 585,106 | ||
Fidelity Materials Central Fund (c) | 1,604 | 226,356 | ||
Fidelity Telecom Services Central Fund (c) | 1,492 | 161,345 | ||
Fidelity Utilities Central Fund (c) | 1,851 | 213,069 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $6,811,306) | 6,011,988 | |||
Fixed-Income Central Funds - 44.9% | ||||
High Yield Fixed-Income Funds - 3.9% | ||||
Fidelity Floating Rate Central Fund (c) | 2,753 | 244,659 | ||
Fidelity High Income Central Fund 1 (c) | 3,688 | 342,210 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 586,869 | |||
Investment Grade Fixed-Income Funds - 41.0% | ||||
Fidelity Tactical Income Central Fund (c) | 64,514 | 6,117,216 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $6,837,348) | 6,704,085 | |||
Money Market Central Funds - 14.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 2,112,569 | 2,112,569 | ||
U.S. Treasury Obligations - 0.1% | ||||
Principal Amount | ||||
U.S. Treasury Bills, yield at date of purchase 0.63% 6/5/08 (b) | $ 16,000 | 15,963 | ||
TOTAL INVESTMENT PORTFOLIO - 99.4% (Cost $15,777,204) | 14,844,605 | |||
NET OTHER ASSETS - 0.6% | 88,637 | |||
NET ASSETS - 100% | $ 14,933,242 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
4 S&P 500 E-Mini Index Contracts | June 2008 | $ 264,800 | $ (458) | ||
The face value of futures purchased as a percentage of net assets - 1.8% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $15,963. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site 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 | $ 40,197 |
Fidelity Consumer Discretionary Central Fund | 3,464 |
Fidelity Consumer Staples Central Fund | 3,976 |
Fidelity Energy Central Fund | 1,971 |
Fidelity Financials Central Fund | 10,854 |
Fidelity Floating Rate Central Fund | 8,266 |
Fidelity Health Care Central Fund | 2,719 |
Fidelity High Income Central Fund 1 | 8,017 |
Fund | Income earned |
Fidelity Industrials Central Fund | $ 4,027 |
Fidelity Information Technology Central Fund | 2,610 |
Fidelity International Equity Central Fund | 3,431 |
Fidelity Materials Central Fund | 1,792 |
Fidelity Tactical Income Central Fund | 108,576 |
Fidelity Telecom Services Central Fund | 1,268 |
Fidelity Utilities Central Fund | 1,755 |
Total | $ 202,923 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ - | $ 628,002 | $ - | $ 545,048 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 534,685 | - | 538,436 | 0.1% |
Fidelity Energy Central Fund | - | 693,392 | - | 696,771 | 0.1% |
Fidelity Financials Central Fund | - | 1,147,230 | - | 914,398 | 0.1% |
Fidelity Floating Rate Central Fund | - | 267,518 | - | 244,659 | 0.0% |
Fidelity Health Care Central Fund | - | 733,860 | - | 628,531 | 0.1% |
Fidelity High Income Central Fund 1 | - | 354,773 | - | 342,210 | 0.1% |
Fidelity Industrials Central Fund | - | 734,586 | - | 686,895 | 0.1% |
Fidelity Information Technology Central Fund | - | 1,010,968 | 8,250 | 816,033 | 0.1% |
Fidelity International Equity Central Fund | - | 661,913 | - | 585,106 | 0.1% |
Fidelity Materials Central Fund | - | 233,352 | - | 226,356 | 0.1% |
Fidelity Tactical Income Central Fund | - | 6,215,056 | - | 6,117,216 | 0.1% |
Fidelity Telecom Services Central Fund | - | 208,611 | - | 161,345 | 0.1% |
Fidelity Utilities Central Fund | - | 232,930 | - | 213,069 | 0.1% |
Total | $ - | $ 13,656,876 | $ 8,250 | $ 12,716,073 |
Other Information |
The information in the following table is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 85.0% |
United Kingdom | 2.4% |
Bermuda | 1.4% |
Canada | 1.1% |
Japan | 1.0% |
Others (individually less than 1%) | 9.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - Unaffiliated issuers (cost $15,981) | $ 15,963 | |
Fidelity Central Funds (cost $15,761,223) | 14,828,642 | |
Total Investments (cost $15,777,204) | $ 14,844,605 | |
Receivable for fund shares sold | 36,087 | |
Distributions receivable from Fidelity Central Funds | 32,700 | |
Receivable for daily variation on futures contracts | 1,020 | |
Prepaid expenses | 38,342 | |
Receivable from investment adviser for expense reductions | 6,265 | |
Total assets | 14,959,019 | |
Liabilities | ||
Accrued management fee | $ 5,014 | |
Distribution fees payable | 3,413 | |
Other affiliated payables | 1,744 | |
Other payables and accrued expenses | 15,606 | |
Total liabilities | 25,777 | |
Net Assets | $ 14,933,242 | |
Net Assets consist of: | ||
Paid in capital | $ 15,805,951 | |
Undistributed net investment income | 74,226 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (13,878) | |
Net unrealized appreciation (depreciation) on investments | (933,057) | |
Net Assets | $ 14,933,242 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 9.24 | |
Maximum offering price per share (100/94.25 of $9.24) | $ 9.80 | |
Class T: | $ 9.24 | |
Maximum offering price per share (100/96.50 of $9.24) | $ 9.58 | |
Class B: | $ 9.23 | |
Class C: | $ 9.23 | |
Asset Manager 40%: | $ 9.25 | |
Institutional Class: | $ 9.25 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 1,776 | |
Income from Fidelity Central Funds | 202,923 | |
Total income | 204,699 | |
Expenses | ||
Management fee | $ 22,981 | |
Transfer agent fees | 6,480 | |
Distribution fees | 19,407 | |
Accounting fees and expenses | 2,299 | |
Custodian fees and expenses | 2,488 | |
Independent trustees' compensation | 18 | |
Registration fees | 39,708 | |
Audit | 19,723 | |
Legal | 2 | |
Miscellaneous | 2,010 | |
Total expenses before reductions | 115,116 | |
Expense reductions | (49,339) | 65,777 |
Net investment income (loss) | 138,922 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | 28 | |
Foreign currency transactions | (674) | |
Futures contracts | (13,232) | |
Total net realized gain (loss) | (13,878) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (932,599) | |
Futures contracts | (458) | |
Total change in net unrealized appreciation (depreciation) | (933,057) | |
Net gain (loss) | (946,935) | |
Net increase (decrease) in net assets resulting from operations | $ (808,013) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 138,922 |
Net realized gain (loss) | (13,878) |
Change in net unrealized appreciation (depreciation) | (933,057) |
Net increase (decrease) in net assets resulting from operations | (808,013) |
Distributions to shareholders from net investment income | (64,696) |
Share transactions - net increase (decrease) | 15,805,951 |
Total increase (decrease) in net assets | 14,933,242 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $74,226) | $ 14,933,242 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .12 |
Net realized and unrealized gain (loss) | (.82) |
Total from investment operations | (.70) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.24 |
Total Return B, C, D | (7.01)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.04% A |
Expenses net of fee waivers, if any | 1.10% A |
Expenses net of all reductions | 1.10% A |
Net investment income (loss) | 2.62% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,616 |
Portfolio turnover rate F | -% I |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .11 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.70) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.24 |
Total Return B, C, D | (7.07)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.28% A |
Expenses net of fee waivers, if any | 1.35% A |
Expenses net of all reductions | 1.35% A |
Net investment income (loss) | 2.37% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,715 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.72) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.23 |
Total Return B, C, D | (7.27)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.79% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,400 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.72) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.23 |
Total Return B, C, D | (7.27)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.78% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,552 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 40%
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.68) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.25 |
Total Return B, C | (6.86)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.70% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.96% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 7,252 |
Portfolio turnover rate E | -% H |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.68) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.25 |
Total Return B, C | (6.86)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.79% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,397 |
Portfolio turnover rate E | -% H |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 40% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 40%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% | ||||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 27,988 | |
Unrealized depreciation | (960,587) | |
Net unrealized appreciation (depreciation) | $ (932,599) | |
Cost for federal income tax purposes | $ 15,777,204 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other then short-term securities, aggregated $13,656,876 and $8,250, respectively.
Semiannual Report
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .42% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 1,802 | $ 1,722 |
Class T | .25% | .25% | 3,576 | 3,440 |
Class B | .75% | .25% | 6,888 | 6,885 |
Class C | .75% | .25% | 7,141 | 7,141 |
$ 19,407 | $ 19,188 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 1,021 |
Class T | 1 |
$ 1,022 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 978 | .14 |
Class T | 938 | .13 |
Class B | 798 | .12 |
Class C | 854 | .12 |
Asset Manager 40% | 2,116 | .11 |
Institutional Class | 796 | .12 |
$ 6,480 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.10% | $ 6,788 |
Class T | 1.35% | 6,621 |
Class B | 1.85% | 6,466 |
Class C | 1.85% | 6,655 |
Asset Manager 40% | .85% | 16,327 |
Institutional Class | .85% | 6,479 |
$ 49,336 |
Effective May 1, 2008 the expense limitation will be changed to .90%, 1.15%, 1.65%, 1.65%, .65% and .65% for Class A, T, B, C, Asset Manager 40%, and Institutional, respectively.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's expenses by $3.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, FMR or its affiliates were the owners of record of 50% of the total outstanding shares of the Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 9,405 |
Class T | 8,481 |
Class B | 6,750 |
Class C | 6,750 |
Asset Manager 40% | 23,260 |
Institutional Class | 10,050 |
Total | $ 64,696 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended | Six months ended | |
Class A | ||
Shares sold | 174,545 | $ 1,729,481 |
Reinvestment of distributions | 964 | 9,365 |
Shares redeemed | (681) | (6,284) |
Net increase (decrease) | 174,828 | $ 1,732,562 |
Class T | ||
Shares sold | 185,040 | $ 1,827,221 |
Reinvestment of distributions | 873 | 8,481 |
Shares redeemed | (207) | (1,900) |
Net increase (decrease) | 185,706 | $ 1,833,802 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |
Six months ended | Six months ended | |
Class B | ||
Shares sold | 151,082 | $ 1,510,131 |
Reinvestment of distributions | 695 | 6,750 |
Shares redeemed | (6) | (53) |
Net increase (decrease) | 151,771 | $ 1,516,828 |
Class C | ||
Shares sold | 167,530 | $ 1,664,039 |
Reinvestment of distributions | 695 | 6,750 |
Net increase (decrease) | 168,225 | $ 1,670,789 |
Asset Manager 40% | ||
Shares sold | 912,187 | $ 8,728,652 |
Reinvestment of distributions | 2,376 | 23,071 |
Shares redeemed | (130,395) | (1,209,813) |
Net increase (decrease) | 784,168 | $ 7,541,910 |
Institutional Class | ||
Shares sold | 150,001 | $ 1,500,010 |
Reinvestment of distributions | 1,035 | 10,050 |
Net increase (decrease) | 151,036 | $ 1,510,060 |
A For the period October 9,2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 40%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 40% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
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(for the deaf and hearing impaired)
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
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(automated graphic) Automated line for quickest service
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(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
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www.fidelity.com
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager SM 40% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
Class A, Class T, Class B,
and Class C are classes of
Fidelity Asset Manager® 40%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 929.90 | $ 5.08 B* |
HypotheticalA | $ 1,000.00 | $ 1,019.50 | $ 5.55 C* |
Class T | |||
Actual | $ 1,000.00 | $ 929.30 | $ 6.23 B* |
HypotheticalA | $ 1,000.00 | $ 1,018.25 | $ 6.81 C* |
Class B | |||
Actual | $ 1,000.00 | $ 927.30 | $ 8.52 B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32 C* |
Class C | |||
Actual | $ 1,000.00 | $ 927.30 | $ 8.52 B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32 C* |
Asset Manager 40% | |||
Actual | $ 1,000.00 | $ 931.40 | $ 3.92 B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29 C* |
Institutional Class | |||
Actual | $ 1,000.00 | $ 931.40 | $ 3.92 B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29 C* |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.10%* |
Class T | 1.35%* |
Class B | 1.85%* |
Class C | 1.85%* |
Asset Manager 40% | .85%* |
Institutional Class | .85%* |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
* If changes to voluntary expense limitations, effective May 1, 2008 for all classes had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | 90% | |
Actual | $ 4.15 | |
HypotheticalA | $ 4.55 | |
Class T | 1.15% | |
Actual | $ 5.31 | |
HypotheticalA | $ 5.81 | |
Class B | 1.65% | |
Actual | $ 7.61 | |
HypotheticalA | $ 8.32 | |
Class C | 1.65% | |
Actual | $ 7.61 | |
HypotheticalA | $ 8.32 | |
Asset Manager 40% | .65% | |
Actual | $ 3.00 | |
HypotheticalA | $ 3.29 | |
Institutional Class | .65% | |
Actual | $ 3.00 | |
HypotheticalA | $ 3.29 |
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | |
(with maturities greater than one year) | % of fund's |
Fannie Mae | 14.1 |
Freddie Mac | 4.9 |
U.S. Treasury Obligations | 4.6 |
Government National Mortgage Association | 1.6 |
Wells Fargo Mortgage Backed Securities Trust | 0.4 |
25.6 | |
Quality Diversification (% of fund's net assets) | |||
As of March 31, 2008 | |||
| U.S. Government and | ||
| AAA,AA,A 10.8% | ||
| BBB 8.0% | ||
| BB 2.9% | ||
| B 1.3% | ||
| CCC,CC,C 0.3% | ||
| Not Rated 0.4% | ||
| Equities 40.9% | ||
| Short-Term Investments and | ||
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent down-grades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.6 |
Procter & Gamble Co. | 0.6 |
Nintendo Co. Ltd. | 0.4 |
General Electric Co. | 0.4 |
JPMorgan Chase & Co. | 0.4 |
2.4 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class and Equity Futures 41.0% | ||
| Bond class 49.4% | ||
| Short-term class 9.6% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 6.1 |
Fidelity Information Technology Central Fund | 5.5 |
Fidelity Energy Central Fund | 4.7 |
Fidelity Industrials Central Fund | 4.6 |
Fidelity Health Care Central Fund | 4.2 |
Fidelity International Equity Central Fund | 3.9 |
Fidelity Consumer Discretionary Central Fund | 3.7 |
Fidelity Consumer Staples Central Fund | 3.6 |
Fidelity Materials Central Fund | 1.5 |
Fidelity Utilities Central Fund | 1.4 |
Fidelity Telecom Services Central Fund | 1.1 |
Total Equity Central Funds | 40.3 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 41.0 |
High Yield Fixed-Income Funds | 3.9 |
Total Fixed-Income Central Funds | 44.9 |
Money Market Central Funds | 14.1 |
Other Short-Term Investments and Net Other Assets | 0.7 |
Total | 100.0 |
At period end, investments in foreign securities, including the Fund's pro-rata share of the underlying Central Funds, was 14.0% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 40.3% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 5,380 | $ 545,048 | ||
Fidelity Consumer Staples Central Fund (c) | 4,245 | 538,436 | ||
Fidelity Energy Central Fund (c) | 4,836 | 696,771 | ||
Fidelity Financials Central Fund (c) | 10,964 | 914,398 | ||
Fidelity Health Care Central Fund (c) | 6,138 | 628,531 | ||
Fidelity Industrials Central Fund (c) | 5,561 | 686,895 | ||
Fidelity Information Technology Central Fund (c) | 7,013 | 816,033 | ||
Fidelity International Equity Central Fund (c) | 6,861 | 585,106 | ||
Fidelity Materials Central Fund (c) | 1,604 | 226,356 | ||
Fidelity Telecom Services Central Fund (c) | 1,492 | 161,345 | ||
Fidelity Utilities Central Fund (c) | 1,851 | 213,069 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $6,811,306) | 6,011,988 | |||
Fixed-Income Central Funds - 44.9% | ||||
High Yield Fixed-Income Funds - 3.9% | ||||
Fidelity Floating Rate Central Fund (c) | 2,753 | 244,659 | ||
Fidelity High Income Central Fund 1 (c) | 3,688 | 342,210 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 586,869 | |||
Investment Grade Fixed-Income Funds - 41.0% | ||||
Fidelity Tactical Income Central Fund (c) | 64,514 | 6,117,216 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $6,837,348) | 6,704,085 | |||
Money Market Central Funds - 14.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 2,112,569 | 2,112,569 | ||
U.S. Treasury Obligations - 0.1% | ||||
Principal Amount | ||||
U.S. Treasury Bills, yield at date of purchase 0.63% 6/5/08 (b) | $ 16,000 | 15,963 | ||
TOTAL INVESTMENT PORTFOLIO - 99.4% (Cost $15,777,204) | 14,844,605 | |||
NET OTHER ASSETS - 0.6% | 88,637 | |||
NET ASSETS - 100% | $ 14,933,242 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
4 S&P 500 E-Mini Index Contracts | June 2008 | $ 264,800 | $ (458) | ||
The face value of futures purchased as a percentage of net assets - 1.8% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $15,963. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site 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 | $ 40,197 |
Fidelity Consumer Discretionary Central Fund | 3,464 |
Fidelity Consumer Staples Central Fund | 3,976 |
Fidelity Energy Central Fund | 1,971 |
Fidelity Financials Central Fund | 10,854 |
Fidelity Floating Rate Central Fund | 8,266 |
Fidelity Health Care Central Fund | 2,719 |
Fidelity High Income Central Fund 1 | 8,017 |
Fund | Income earned |
Fidelity Industrials Central Fund | $ 4,027 |
Fidelity Information Technology Central Fund | 2,610 |
Fidelity International Equity Central Fund | 3,431 |
Fidelity Materials Central Fund | 1,792 |
Fidelity Tactical Income Central Fund | 108,576 |
Fidelity Telecom Services Central Fund | 1,268 |
Fidelity Utilities Central Fund | 1,755 |
Total | $ 202,923 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ - | $ 628,002 | $ - | $ 545,048 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 534,685 | - | 538,436 | 0.1% |
Fidelity Energy Central Fund | - | 693,392 | - | 696,771 | 0.1% |
Fidelity Financials Central Fund | - | 1,147,230 | - | 914,398 | 0.1% |
Fidelity Floating Rate Central Fund | - | 267,518 | - | 244,659 | 0.0% |
Fidelity Health Care Central Fund | - | 733,860 | - | 628,531 | 0.1% |
Fidelity High Income Central Fund 1 | - | 354,773 | - | 342,210 | 0.1% |
Fidelity Industrials Central Fund | - | 734,586 | - | 686,895 | 0.1% |
Fidelity Information Technology Central Fund | - | 1,010,968 | 8,250 | 816,033 | 0.1% |
Fidelity International Equity Central Fund | - | 661,913 | - | 585,106 | 0.1% |
Fidelity Materials Central Fund | - | 233,352 | - | 226,356 | 0.1% |
Fidelity Tactical Income Central Fund | - | 6,215,056 | - | 6,117,216 | 0.1% |
Fidelity Telecom Services Central Fund | - | 208,611 | - | 161,345 | 0.1% |
Fidelity Utilities Central Fund | - | 232,930 | - | 213,069 | 0.1% |
Total | $ - | $ 13,656,876 | $ 8,250 | $ 12,716,073 |
Other Information |
The information in the following table is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 85.0% |
United Kingdom | 2.4% |
Bermuda | 1.4% |
Canada | 1.1% |
Japan | 1.0% |
Others (individually less than 1%) | 9.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - Unaffiliated issuers (cost $15,981) | $ 15,963 | |
Fidelity Central Funds (cost $15,761,223) | 14,828,642 | |
Total Investments (cost $15,777,204) | $ 14,844,605 | |
Receivable for fund shares sold | 36,087 | |
Distributions receivable from Fidelity Central Funds | 32,700 | |
Receivable for daily variation on futures contracts | 1,020 | |
Prepaid expenses | 38,342 | |
Receivable from investment adviser for expense reductions | 6,265 | |
Total assets | 14,959,019 | |
Liabilities | ||
Accrued management fee | $ 5,014 | |
Distribution fees payable | 3,413 | |
Other affiliated payables | 1,744 | |
Other payables and accrued expenses | 15,606 | |
Total liabilities | 25,777 | |
Net Assets | $ 14,933,242 | |
Net Assets consist of: | ||
Paid in capital | $ 15,805,951 | |
Undistributed net investment income | 74,226 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (13,878) | |
Net unrealized appreciation (depreciation) on investments | (933,057) | |
Net Assets | $ 14,933,242 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 9.24 | |
Maximum offering price per share (100/94.25 of $9.24) | $ 9.80 | |
Class T: | $ 9.24 | |
Maximum offering price per share (100/96.50 of $9.24) | $ 9.58 | |
Class B: | $ 9.23 | |
Class C: | $ 9.23 | |
Asset Manager 40%: | $ 9.25 | |
Institutional Class: | $ 9.25 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 1,776 | |
Income from Fidelity Central Funds | 202,923 | |
Total income | 204,699 | |
Expenses | ||
Management fee | $ 22,981 | |
Transfer agent fees | 6,480 | |
Distribution fees | 19,407 | |
Accounting fees and expenses | 2,299 | |
Custodian fees and expenses | 2,488 | |
Independent trustees' compensation | 18 | |
Registration fees | 39,708 | |
Audit | 19,723 | |
Legal | 2 | |
Miscellaneous | 2,010 | |
Total expenses before reductions | 115,116 | |
Expense reductions | (49,339) | 65,777 |
Net investment income (loss) | 138,922 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | 28 | |
Foreign currency transactions | (674) | |
Futures contracts | (13,232) | |
Total net realized gain (loss) | (13,878) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (932,599) | |
Futures contracts | (458) | |
Total change in net unrealized appreciation (depreciation) | (933,057) | |
Net gain (loss) | (946,935) | |
Net increase (decrease) in net assets resulting from operations | $ (808,013) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 138,922 |
Net realized gain (loss) | (13,878) |
Change in net unrealized appreciation (depreciation) | (933,057) |
Net increase (decrease) in net assets resulting from operations | (808,013) |
Distributions to shareholders from net investment income | (64,696) |
Share transactions - net increase (decrease) | 15,805,951 |
Total increase (decrease) in net assets | 14,933,242 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $74,226) | $ 14,933,242 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .12 |
Net realized and unrealized gain (loss) | (.82) |
Total from investment operations | (.70) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.24 |
Total Return B, C, D | (7.01)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.04% A |
Expenses net of fee waivers, if any | 1.10% A |
Expenses net of all reductions | 1.10% A |
Net investment income (loss) | 2.62% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,616 |
Portfolio turnover rate F | -% I |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .11 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.70) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.24 |
Total Return B, C, D | (7.07)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.28% A |
Expenses net of fee waivers, if any | 1.35% A |
Expenses net of all reductions | 1.35% A |
Net investment income (loss) | 2.37% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,715 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.72) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.23 |
Total Return B, C, D | (7.27)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.79% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,400 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.72) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.23 |
Total Return B, C, D | (7.27)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.78% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,552 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 40%
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.68) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.25 |
Total Return B, C | (6.86)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.70% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.96% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 7,252 |
Portfolio turnover rate E | -% H |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.68) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.25 |
Total Return B, C | (6.86)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.79% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,397 |
Portfolio turnover rate E | -% H |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 40% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 40%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% | ||||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 27,988 | |
Unrealized depreciation | (960,587) | |
Net unrealized appreciation (depreciation) | $ (932,599) | |
Cost for federal income tax purposes | $ 15,777,204 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other then short-term securities, aggregated $13,656,876 and $8,250, respectively.
Semiannual Report
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .42% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 1,802 | $ 1,722 |
Class T | .25% | .25% | 3,576 | 3,440 |
Class B | .75% | .25% | 6,888 | 6,885 |
Class C | .75% | .25% | 7,141 | 7,141 |
$ 19,407 | $ 19,188 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 1,021 |
Class T | 1 |
$ 1,022 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 978 | .14 |
Class T | 938 | .13 |
Class B | 798 | .12 |
Class C | 854 | .12 |
Asset Manager 40% | 2,116 | .11 |
Institutional Class | 796 | .12 |
$ 6,480 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.10% | $ 6,788 |
Class T | 1.35% | 6,621 |
Class B | 1.85% | 6,466 |
Class C | 1.85% | 6,655 |
Asset Manager 40% | .85% | 16,327 |
Institutional Class | .85% | 6,479 |
$ 49,336 |
Effective May 1, 2008 the expense limitation will be changed to .90%, 1.15%, 1.65%, 1.65%, .65% and .65% for Class A, T, B, C, Asset Manager 40%, and Institutional, respectively.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's expenses by $3.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, FMR or its affiliates were the owners of record of 50% of the total outstanding shares of the Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 9,405 |
Class T | 8,481 |
Class B | 6,750 |
Class C | 6,750 |
Asset Manager 40% | 23,260 |
Institutional Class | 10,050 |
Total | $ 64,696 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended | Six months ended | |
Class A | ||
Shares sold | 174,545 | $ 1,729,481 |
Reinvestment of distributions | 964 | 9,365 |
Shares redeemed | (681) | (6,284) |
Net increase (decrease) | 174,828 | $ 1,732,562 |
Class T | ||
Shares sold | 185,040 | $ 1,827,221 |
Reinvestment of distributions | 873 | 8,481 |
Shares redeemed | (207) | (1,900) |
Net increase (decrease) | 185,706 | $ 1,833,802 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |
Six months ended | Six months ended | |
Class B | ||
Shares sold | 151,082 | $ 1,510,131 |
Reinvestment of distributions | 695 | 6,750 |
Shares redeemed | (6) | (53) |
Net increase (decrease) | 151,771 | $ 1,516,828 |
Class C | ||
Shares sold | 167,530 | $ 1,664,039 |
Reinvestment of distributions | 695 | 6,750 |
Net increase (decrease) | 168,225 | $ 1,670,789 |
Asset Manager 40% | ||
Shares sold | 912,187 | $ 8,728,652 |
Reinvestment of distributions | 2,376 | 23,071 |
Shares redeemed | (130,395) | (1,209,813) |
Net increase (decrease) | 784,168 | $ 7,541,910 |
Institutional Class | ||
Shares sold | 150,001 | $ 1,500,010 |
Reinvestment of distributions | 1,035 | 10,050 |
Net increase (decrease) | 151,036 | $ 1,510,060 |
A For the period October 9,2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 40%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 40% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AFAN-USAN-0508
1.849955.100
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset ManagerSM 40% -
Institutional Class
Semiannual Report
March 31, 2008
Institutional Class is a class of
Fidelity Asset Manager® 40%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 929.90 | $ 5.08 B* |
HypotheticalA | $ 1,000.00 | $ 1,019.50 | $ 5.55 C* |
Class T | |||
Actual | $ 1,000.00 | $ 929.30 | $ 6.23 B* |
HypotheticalA | $ 1,000.00 | $ 1,018.25 | $ 6.81 C* |
Class B | |||
Actual | $ 1,000.00 | $ 927.30 | $ 8.52 B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32 C* |
Class C | |||
Actual | $ 1,000.00 | $ 927.30 | $ 8.52 B* |
HypotheticalA | $ 1,000.00 | $ 1,015.75 | $ 9.32 C* |
Asset Manager 40% | |||
Actual | $ 1,000.00 | $ 931.40 | $ 3.92 B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29 C* |
Institutional Class | |||
Actual | $ 1,000.00 | $ 931.40 | $ 3.92 B* |
HypotheticalA | $ 1,000.00 | $ 1,020.75 | $ 4.29 C* |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.10%* |
Class T | 1.35%* |
Class B | 1.85%* |
Class C | 1.85%* |
Asset Manager 40% | .85%* |
Institutional Class | .85%* |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
* If changes to voluntary expense limitations, effective May 1, 2008 for all classes had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | 90% | |
Actual | $ 4.15 | |
HypotheticalA | $ 4.55 | |
Class T | 1.15% | |
Actual | $ 5.31 | |
HypotheticalA | $ 5.81 | |
Class B | 1.65% | |
Actual | $ 7.61 | |
HypotheticalA | $ 8.32 | |
Class C | 1.65% | |
Actual | $ 7.61 | |
HypotheticalA | $ 8.32 | |
Asset Manager 40% | .65% | |
Actual | $ 3.00 | |
HypotheticalA | $ 3.29 | |
Institutional Class | .65% | |
Actual | $ 3.00 | |
HypotheticalA | $ 3.29 |
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Five Bond Issuers as of March 31, 2008 | |
(with maturities greater than one year) | % of fund's |
Fannie Mae | 14.1 |
Freddie Mac | 4.9 |
U.S. Treasury Obligations | 4.6 |
Government National Mortgage Association | 1.6 |
Wells Fargo Mortgage Backed Securities Trust | 0.4 |
25.6 | |
Quality Diversification (% of fund's net assets) | |||
As of March 31, 2008 | |||
| U.S. Government and | ||
| AAA,AA,A 10.8% | ||
| BBB 8.0% | ||
| BB 2.9% | ||
| B 1.3% | ||
| CCC,CC,C 0.3% | ||
| Not Rated 0.4% | ||
| Equities 40.9% | ||
| Short-Term Investments and | ||
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent down-grades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Top Five Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.6 |
Procter & Gamble Co. | 0.6 |
Nintendo Co. Ltd. | 0.4 |
General Electric Co. | 0.4 |
JPMorgan Chase & Co. | 0.4 |
2.4 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class and Equity Futures 41.0% | ||
| Bond class 49.4% | ||
| Short-term class 9.6% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 6.1 |
Fidelity Information Technology Central Fund | 5.5 |
Fidelity Energy Central Fund | 4.7 |
Fidelity Industrials Central Fund | 4.6 |
Fidelity Health Care Central Fund | 4.2 |
Fidelity International Equity Central Fund | 3.9 |
Fidelity Consumer Discretionary Central Fund | 3.7 |
Fidelity Consumer Staples Central Fund | 3.6 |
Fidelity Materials Central Fund | 1.5 |
Fidelity Utilities Central Fund | 1.4 |
Fidelity Telecom Services Central Fund | 1.1 |
Total Equity Central Funds | 40.3 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 41.0 |
High Yield Fixed-Income Funds | 3.9 |
Total Fixed-Income Central Funds | 44.9 |
Money Market Central Funds | 14.1 |
Other Short-Term Investments and Net Other Assets | 0.7 |
Total | 100.0 |
At period end, investments in foreign securities, including the Fund's pro-rata share of the underlying Central Funds, was 14.0% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 40.3% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 5,380 | $ 545,048 | ||
Fidelity Consumer Staples Central Fund (c) | 4,245 | 538,436 | ||
Fidelity Energy Central Fund (c) | 4,836 | 696,771 | ||
Fidelity Financials Central Fund (c) | 10,964 | 914,398 | ||
Fidelity Health Care Central Fund (c) | 6,138 | 628,531 | ||
Fidelity Industrials Central Fund (c) | 5,561 | 686,895 | ||
Fidelity Information Technology Central Fund (c) | 7,013 | 816,033 | ||
Fidelity International Equity Central Fund (c) | 6,861 | 585,106 | ||
Fidelity Materials Central Fund (c) | 1,604 | 226,356 | ||
Fidelity Telecom Services Central Fund (c) | 1,492 | 161,345 | ||
Fidelity Utilities Central Fund (c) | 1,851 | 213,069 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $6,811,306) | 6,011,988 | |||
Fixed-Income Central Funds - 44.9% | ||||
High Yield Fixed-Income Funds - 3.9% | ||||
Fidelity Floating Rate Central Fund (c) | 2,753 | 244,659 | ||
Fidelity High Income Central Fund 1 (c) | 3,688 | 342,210 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 586,869 | |||
Investment Grade Fixed-Income Funds - 41.0% | ||||
Fidelity Tactical Income Central Fund (c) | 64,514 | 6,117,216 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $6,837,348) | 6,704,085 | |||
Money Market Central Funds - 14.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 2,112,569 | 2,112,569 | ||
U.S. Treasury Obligations - 0.1% | ||||
Principal Amount | ||||
U.S. Treasury Bills, yield at date of purchase 0.63% 6/5/08 (b) | $ 16,000 | 15,963 | ||
TOTAL INVESTMENT PORTFOLIO - 99.4% (Cost $15,777,204) | 14,844,605 | |||
NET OTHER ASSETS - 0.6% | 88,637 | |||
NET ASSETS - 100% | $ 14,933,242 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
4 S&P 500 E-Mini Index Contracts | June 2008 | $ 264,800 | $ (458) | ||
The face value of futures purchased as a percentage of net assets - 1.8% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $15,963. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site 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 | $ 40,197 |
Fidelity Consumer Discretionary Central Fund | 3,464 |
Fidelity Consumer Staples Central Fund | 3,976 |
Fidelity Energy Central Fund | 1,971 |
Fidelity Financials Central Fund | 10,854 |
Fidelity Floating Rate Central Fund | 8,266 |
Fidelity Health Care Central Fund | 2,719 |
Fidelity High Income Central Fund 1 | 8,017 |
Fund | Income earned |
Fidelity Industrials Central Fund | $ 4,027 |
Fidelity Information Technology Central Fund | 2,610 |
Fidelity International Equity Central Fund | 3,431 |
Fidelity Materials Central Fund | 1,792 |
Fidelity Tactical Income Central Fund | 108,576 |
Fidelity Telecom Services Central Fund | 1,268 |
Fidelity Utilities Central Fund | 1,755 |
Total | $ 202,923 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ - | $ 628,002 | $ - | $ 545,048 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 534,685 | - | 538,436 | 0.1% |
Fidelity Energy Central Fund | - | 693,392 | - | 696,771 | 0.1% |
Fidelity Financials Central Fund | - | 1,147,230 | - | 914,398 | 0.1% |
Fidelity Floating Rate Central Fund | - | 267,518 | - | 244,659 | 0.0% |
Fidelity Health Care Central Fund | - | 733,860 | - | 628,531 | 0.1% |
Fidelity High Income Central Fund 1 | - | 354,773 | - | 342,210 | 0.1% |
Fidelity Industrials Central Fund | - | 734,586 | - | 686,895 | 0.1% |
Fidelity Information Technology Central Fund | - | 1,010,968 | 8,250 | 816,033 | 0.1% |
Fidelity International Equity Central Fund | - | 661,913 | - | 585,106 | 0.1% |
Fidelity Materials Central Fund | - | 233,352 | - | 226,356 | 0.1% |
Fidelity Tactical Income Central Fund | - | 6,215,056 | - | 6,117,216 | 0.1% |
Fidelity Telecom Services Central Fund | - | 208,611 | - | 161,345 | 0.1% |
Fidelity Utilities Central Fund | - | 232,930 | - | 213,069 | 0.1% |
Total | $ - | $ 13,656,876 | $ 8,250 | $ 12,716,073 |
Other Information |
The information in the following table is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 85.0% |
United Kingdom | 2.4% |
Bermuda | 1.4% |
Canada | 1.1% |
Japan | 1.0% |
Others (individually less than 1%) | 9.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - Unaffiliated issuers (cost $15,981) | $ 15,963 | |
Fidelity Central Funds (cost $15,761,223) | 14,828,642 | |
Total Investments (cost $15,777,204) | $ 14,844,605 | |
Receivable for fund shares sold | 36,087 | |
Distributions receivable from Fidelity Central Funds | 32,700 | |
Receivable for daily variation on futures contracts | 1,020 | |
Prepaid expenses | 38,342 | |
Receivable from investment adviser for expense reductions | 6,265 | |
Total assets | 14,959,019 | |
Liabilities | ||
Accrued management fee | $ 5,014 | |
Distribution fees payable | 3,413 | |
Other affiliated payables | 1,744 | |
Other payables and accrued expenses | 15,606 | |
Total liabilities | 25,777 | |
Net Assets | $ 14,933,242 | |
Net Assets consist of: | ||
Paid in capital | $ 15,805,951 | |
Undistributed net investment income | 74,226 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (13,878) | |
Net unrealized appreciation (depreciation) on investments | (933,057) | |
Net Assets | $ 14,933,242 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 9.24 | |
Maximum offering price per share (100/94.25 of $9.24) | $ 9.80 | |
Class T: | $ 9.24 | |
Maximum offering price per share (100/96.50 of $9.24) | $ 9.58 | |
Class B: | $ 9.23 | |
Class C: | $ 9.23 | |
Asset Manager 40%: | $ 9.25 | |
Institutional Class: | $ 9.25 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 1,776 | |
Income from Fidelity Central Funds | 202,923 | |
Total income | 204,699 | |
Expenses | ||
Management fee | $ 22,981 | |
Transfer agent fees | 6,480 | |
Distribution fees | 19,407 | |
Accounting fees and expenses | 2,299 | |
Custodian fees and expenses | 2,488 | |
Independent trustees' compensation | 18 | |
Registration fees | 39,708 | |
Audit | 19,723 | |
Legal | 2 | |
Miscellaneous | 2,010 | |
Total expenses before reductions | 115,116 | |
Expense reductions | (49,339) | 65,777 |
Net investment income (loss) | 138,922 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | 28 | |
Foreign currency transactions | (674) | |
Futures contracts | (13,232) | |
Total net realized gain (loss) | (13,878) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (932,599) | |
Futures contracts | (458) | |
Total change in net unrealized appreciation (depreciation) | (933,057) | |
Net gain (loss) | (946,935) | |
Net increase (decrease) in net assets resulting from operations | $ (808,013) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 138,922 |
Net realized gain (loss) | (13,878) |
Change in net unrealized appreciation (depreciation) | (933,057) |
Net increase (decrease) in net assets resulting from operations | (808,013) |
Distributions to shareholders from net investment income | (64,696) |
Share transactions - net increase (decrease) | 15,805,951 |
Total increase (decrease) in net assets | 14,933,242 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $74,226) | $ 14,933,242 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .12 |
Net realized and unrealized gain (loss) | (.82) |
Total from investment operations | (.70) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.24 |
Total Return B, C, D | (7.01)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.04% A |
Expenses net of fee waivers, if any | 1.10% A |
Expenses net of all reductions | 1.10% A |
Net investment income (loss) | 2.62% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,616 |
Portfolio turnover rate F | -% I |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .11 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.70) |
Distributions from net investment income | (.06) |
Net asset value, end of period | $ 9.24 |
Total Return B, C, D | (7.07)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.28% A |
Expenses net of fee waivers, if any | 1.35% A |
Expenses net of all reductions | 1.35% A |
Net investment income (loss) | 2.37% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,715 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.72) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.23 |
Total Return B, C, D | (7.27)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.79% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,400 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 G | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.72) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 9.23 |
Total Return B, C, D | (7.27)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.78% A |
Expenses net of fee waivers, if any | 1.85% A |
Expenses net of all reductions | 1.85% A |
Net investment income (loss) | 1.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,552 |
Portfolio turnover rate F | -% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
I Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 40%
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.68) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.25 |
Total Return B, C | (6.86)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.70% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.96% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 7,252 |
Portfolio turnover rate E | -% H |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .13 |
Net realized and unrealized gain (loss) | (.81) |
Total from investment operations | (.68) |
Distributions from net investment income | (.07) |
Net asset value, end of period | $ 9.25 |
Total Return B, C | (6.86)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 1.79% A |
Expenses net of fee waivers, if any | .85% A |
Expenses net of all reductions | .85% A |
Net investment income (loss) | 2.87% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,397 |
Portfolio turnover rate E | -% H |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Amount represents less than 1%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 40% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 40%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% | ||||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 27,988 | |
Unrealized depreciation | (960,587) | |
Net unrealized appreciation (depreciation) | $ (932,599) | |
Cost for federal income tax purposes | $ 15,777,204 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other then short-term securities, aggregated $13,656,876 and $8,250, respectively.
Semiannual Report
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .42% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 1,802 | $ 1,722 |
Class T | .25% | .25% | 3,576 | 3,440 |
Class B | .75% | .25% | 6,888 | 6,885 |
Class C | .75% | .25% | 7,141 | 7,141 |
$ 19,407 | $ 19,188 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 1,021 |
Class T | 1 |
$ 1,022 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 978 | .14 |
Class T | 938 | .13 |
Class B | 798 | .12 |
Class C | 854 | .12 |
Asset Manager 40% | 2,116 | .11 |
Institutional Class | 796 | .12 |
$ 6,480 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.10% | $ 6,788 |
Class T | 1.35% | 6,621 |
Class B | 1.85% | 6,466 |
Class C | 1.85% | 6,655 |
Asset Manager 40% | .85% | 16,327 |
Institutional Class | .85% | 6,479 |
$ 49,336 |
Effective May 1, 2008 the expense limitation will be changed to .90%, 1.15%, 1.65%, 1.65%, .65% and .65% for Class A, T, B, C, Asset Manager 40%, and Institutional, respectively.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's expenses by $3.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, FMR or its affiliates were the owners of record of 50% of the total outstanding shares of the Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 9,405 |
Class T | 8,481 |
Class B | 6,750 |
Class C | 6,750 |
Asset Manager 40% | 23,260 |
Institutional Class | 10,050 |
Total | $ 64,696 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended | Six months ended | |
Class A | ||
Shares sold | 174,545 | $ 1,729,481 |
Reinvestment of distributions | 964 | 9,365 |
Shares redeemed | (681) | (6,284) |
Net increase (decrease) | 174,828 | $ 1,732,562 |
Class T | ||
Shares sold | 185,040 | $ 1,827,221 |
Reinvestment of distributions | 873 | 8,481 |
Shares redeemed | (207) | (1,900) |
Net increase (decrease) | 185,706 | $ 1,833,802 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |
Six months ended | Six months ended | |
Class B | ||
Shares sold | 151,082 | $ 1,510,131 |
Reinvestment of distributions | 695 | 6,750 |
Shares redeemed | (6) | (53) |
Net increase (decrease) | 151,771 | $ 1,516,828 |
Class C | ||
Shares sold | 167,530 | $ 1,664,039 |
Reinvestment of distributions | 695 | 6,750 |
Net increase (decrease) | 168,225 | $ 1,670,789 |
Asset Manager 40% | ||
Shares sold | 912,187 | $ 8,728,652 |
Reinvestment of distributions | 2,376 | 23,071 |
Shares redeemed | (130,395) | (1,209,813) |
Net increase (decrease) | 784,168 | $ 7,541,910 |
Institutional Class | ||
Shares sold | 150,001 | $ 1,500,010 |
Reinvestment of distributions | 1,035 | 10,050 |
Net increase (decrease) | 151,036 | $ 1,510,060 |
A For the period October 9,2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 40%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 40% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Semiannual Report
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Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AFANI-USAN-0508
1.849945.100
(Fidelity Investment logo)(registered trademark)
Fidelity
Asset Manager® 50%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, http://visit www.fidelity.com (search for "proxy voting guidelines") 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.
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/holdings or http://www.advisor.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 923.60 | $ 4.81 |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05 |
Class T | |||
Actual | $ 1,000.00 | $ 922.60 | $ 5.91 |
HypotheticalA | $ 1,000.00 | $ 1,018.85 | $ 6.21 |
Class B | |||
Actual | $ 1,000.00 | $ 919.60 | $ 8.59 |
HypotheticalA | $ 1,000.00 | $ 1,016.05 | $ 9.02 |
Class C | |||
Actual | $ 1,000.00 | $ 920.40 | $ 8.45 |
HypotheticalA | $ 1,000.00 | $ 1,016.20 | $ 8.87 |
Asset Manager 50% | |||
Actual | $ 1,000.00 | $ 925.50 | $ 3.37 |
HypotheticalA | $ 1,000.00 | $ 1,021.50 | $ 3.54 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 925.20 | $ 3.27 |
HypotheticalA | $ 1,000.00 | $ 1,021.60 | $ 3.44 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.00% |
Class T | 1.23% |
Class B | 1.79% |
Class C | 1.76% |
Asset Manager 50% | .70% |
Institutional Class | .68% |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.7 | 0.6 |
Procter & Gamble Co. | 0.7 | 0.6 |
Nintendo Co. Ltd. | 0.6 | 0.1 |
General Electric Co. | 0.5 | 0.6 |
JPMorgan Chase & Co. | 0.5 | 0.4 |
American International Group, Inc. | 0.5 | 0.5 |
The Coca-Cola Co. | 0.5 | 0.4 |
CVS Caremark Corp. | 0.5 | 0.2 |
PepsiCo, Inc. | 0.4 | 0.3 |
Bank of America Corp. | 0.4 | 0.4 |
5.3 | ||
Top Five Bond Issuers as of March 31, 2008 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
Fannie Mae | 13.2 | 11.2 |
Freddie Mac | 4.6 | 4.1 |
U.S. Treasury Obligations | 4.3 | 5.2 |
Government National Mortgage Association | 1.5 | 0.7 |
Wells Fargo Mortgage Backed Securities Trust | 0.4 | 0.5 |
24.0 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
 | Bond class 46.6% | | Bond class 51.5% | ||||
| Short-Term class 2.2% |  | Short-Term class* (2.3)% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
*Short-term class is not included in the pie chart.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 7.5 |
Fidelity Information Technology Central Fund | 6.7 |
Fidelity Energy Central Fund | 5.7 |
Fidelity Industrials Central Fund | 5.7 |
Fidelity Health Care Central Fund | 5.2 |
Fidelity Consumer Discretionary Central Fund | 4.5 |
Fidelity Consumer Staples Central Fund | 4.4 |
Fidelity International Equity Central Fund | 4.4 |
Fidelity Materials Central Fund | 1.9 |
Fidelity Utilities Central Fund | 1.8 |
Fidelity Telecom Services Central Fund | 1.3 |
Total Equity Central Funds | 49.1 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 38.4 |
High Yield Fixed-Income Funds | 4.3 |
Total Fixed-Income Central Funds | 42.7 |
Money Market Central Funds | 8.1 |
Other Short-Term Investments and Net Other Assets | 0.1 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 16.9% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 49.1% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 3,387,771 | $ 343,215 | ||
Fidelity Consumer Staples Central Fund (c) | 2,673,325 | 339,085 | ||
Fidelity Energy Central Fund (c) | 3,045,137 | 438,743 | ||
Fidelity Financials Central Fund (c) | 6,903,705 | 575,769 | ||
Fidelity Health Care Central Fund (c) | 3,865,298 | 395,807 | ||
Fidelity Industrials Central Fund (c) | 3,501,469 | 432,501 | ||
Fidelity Information Technology Central Fund (c) | 4,415,888 | 513,833 | ||
Fidelity International Equity Central Fund (c) | 3,895,000 | 332,166 | ||
Fidelity Materials Central Fund (c) | 1,010,037 | 142,536 | ||
Fidelity Telecom Services Central Fund (c) | 939,550 | 101,603 | ||
Fidelity Utilities Central Fund (c) | 1,165,553 | 134,167 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $3,430,123) | 3,749,425 | |||
Fixed-Income Central Funds - 42.7% | ||||
Investment Grade Fixed-Income Funds - 38.4% | ||||
Fidelity Tactical Income Central Fund (c) | 30,942,673 | 2,933,984 | ||
High Yield Fixed-Income Funds - 4.3% | ||||
Fidelity Floating Rate Central Fund (c) | 2,245,558 | 199,563 | ||
Fidelity High Income Central Fund 1 (c) | 1,379,815 | 128,033 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 327,596 | |||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $3,374,697) | 3,261,580 | |||
Money Market Central Funds - 8.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 265,153,840 | 265,154 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 350,013,442 | 350,013 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $615,167) | 615,167 | |||
U.S. Treasury Obligations - 0.2% | ||||
Principal Amount (000s) | Value (000s) | |||
U.S. Treasury Bills, yield at date of purchase 1.59% to 3.19% 4/10/08 to 6/5/08 (b) | $ 16,300 | $ 16,272 | ||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $7,436,251) | 7,642,444 | |||
NET OTHER ASSETS - (0.1)% | (7,295) | |||
NET ASSETS - 100% | $ 7,635,149 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
220 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 12,325 | $ 617 | ||
108 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 12,233 | (28) | ||
3,476 S&P 500 E-Mini Index Contracts | June 2008 | 230,111 | 5,432 | ||
103 TOPIX 150 Index Contracts (Japan) | June 2008 | 12,559 | 182 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 267,228 | $ 6,203 | |||
The face value of futures purchased as a percentage of net assets - 3.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $16,272,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 3,193 |
Fidelity Consumer Discretionary Central Fund | 2,846 |
Fidelity Consumer Staples Central Fund | 3,181 |
Fidelity Energy Central Fund | 1,675 |
Fidelity Financials Central Fund | 9,320 |
Fidelity Floating Rate Central Fund | 8,308 |
Fidelity Health Care Central Fund | 2,203 |
Fidelity High Income Central Fund 1 | 5,588 |
Fidelity Industrials Central Fund | 3,291 |
Fidelity Information Technology Central Fund | 2,031 |
Fidelity International Equity Central Fund | 1,948 |
Fidelity Materials Central Fund | 1,545 |
Fidelity Money Market Central Fund | 9,434 |
Fidelity Securities Lending Cash Central Fund | 14 |
Fidelity Tactical Income Central Fund | 86,460 |
Fidelity Telecom Services Central Fund | 1,203 |
Fidelity Utilities Central Fund | 1,539 |
Total | $ 143,779 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, |
Fidelity Consumer Discretionary | $ 412,360 | $ - | $ - | $ 343,215 | 56.8% |
Fidelity Consumer Staples Central Fund | 337,240 | - | - | 339,085 | 56.8% |
Fidelity Energy | 427,750 | - | - | 438,743 | 56.8% |
Fidelity Financials Central Fund | 765,273 | - | - | 575,769 | 56.8% |
Fidelity Floating Rate Central Fund | 271,825 | - | 52,652 | 199,563 | 8.3% |
Fidelity Health Care Central Fund | 462,483 | - | - | 395,807 | 56.8% |
Fidelity High Income Central Fund 1 | 153,712 | - | 17,798 | 128,033 | 49.2% |
Fidelity Industrials Central Fund | 473,294 | - | - | 432,501 | 56.8% |
Fidelity Information Technology | 662,781 | - | - | 513,833 | 56.8% |
Fidelity International Equity Central Fund | - | 387,418 | - | 332,166 | 43.5% |
Fidelity Materials Central Fund | 148,405 | - | - | 142,536 | 56.8% |
Fidelity Tactical Income Central Fund | 3,496,910 | 86,460 | 583,732 | 2,933,984 | 60.0% |
Fidelity Telecom Services | 143,131 | - | - | 101,603 | 56.8% |
Fidelity Utilities | 143,573 | - | - | 134,167 | 56.8% |
Total | $ 7,898,737 | $ 473,878 | $ 654,182 | $ 7,011,005 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 23.8% |
AAA,AA,A | 10.4% |
BBB | 7.4% |
BB | 3.1% |
B | 1.4% |
CCC,CC,C | 0.3% |
Not Rated | 0.4% |
Equities | 51.2% |
Short-Term Investments and Net Other Assets | 2.0% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 83.1% |
United Kingdom | 2.7% |
Bermuda | 1.7% |
Japan | 1.4% |
Canada | 1.3% |
Switzerland | 1.0% |
Germany | 1.0% |
Others (individually less than 1%) | 7.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $16,264) | $ 16,272 | |
Fidelity Central Funds (cost $7,419,987) | 7,626,172 | |
Total Investments (cost $7,436,251) | $ 7,642,444 | |
Receivable for fund shares sold | 3,494 | |
Dividends receivable | 25 | |
Distributions receivable from Fidelity Central Funds | 16,285 | |
Receivable for daily variation on futures contracts | 494 | |
Prepaid expenses | 20 | |
Other receivables | 309 | |
Total assets | 7,663,071 | |
Liabilities | ||
Payable for investments purchased | $ 12,407 | |
Payable for fund shares redeemed | 10,435 | |
Accrued management fee | 3,230 | |
Distribution fees payable | 9 | |
Other affiliated payables | 1,284 | |
Other payables and accrued expenses | 557 | |
Total liabilities | 27,922 | |
Net Assets | $ 7,635,149 | |
Net Assets consist of: | ||
Paid in capital | $ 7,777,258 | |
Undistributed net investment income | 51,470 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (405,978) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 212,399 | |
Net Assets | $ 7,635,149 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Calculation of Maximum Offering Price | $ 14.50 | |
Maximum offering price per share (100/94.25 of $14.50) | $ 15.38 | |
Class T: | $ 14.49 | |
Maximum offering price per share (100/96.50 of $14.49) | $ 15.02 | |
Class B: | $ 14.46 | |
Class C: | $ 14.45 | |
Asset Manager 50%: | $ 14.53 | |
Institutional Class: | $ 14.52 | |
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.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends | $ 98 | |
Interest | 370 | |
Income from Fidelity Central Funds | 143,779 | |
Total income | 144,247 | |
Expenses | ||
Management fee | $ 20,907 | |
Transfer agent fees | 7,111 | |
Distribution fees | 43 | |
Accounting and security lending fees | 750 | |
Custodian fees and expenses | 33 | |
Independent trustees' compensation | 17 | |
Registration fees | 53 | |
Audit | 46 | |
Legal | 45 | |
Interest | 38 | |
Miscellaneous | 30 | |
Total expenses before reductions | 29,073 | |
Expense reductions | (345) | 28,728 |
Net investment income (loss) | 115,519 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $213) | 12,302 | |
Fidelity Central Funds | (11,236) | |
Foreign currency transactions | (316) | |
Futures contracts | (30,556) | |
Total net realized gain (loss) | (29,806) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $108) | (715,866) | |
Assets and liabilities in foreign currencies | 1 | |
Futures contracts | (4,679) | |
Total change in net unrealized appreciation (depreciation) | (720,544) | |
Net gain (loss) | (750,350) | |
Net increase (decrease) in net assets resulting from operations | $ (634,831) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 115,519 | $ 267,544 |
Net realized gain (loss) | (29,806) | 291,166 |
Change in net unrealized appreciation (depreciation) | (720,544) | 485,621 |
Net increase (decrease) in net assets resulting | (634,831) | 1,044,331 |
Distributions to shareholders from net investment income | (146,609) | (271,879) |
Distributions to shareholders from net realized gain | (556,508) | (485,946) |
Total distributions | (703,117) | (757,825) |
Share transactions - net increase (decrease) | 6,374 | (523,997) |
Total increase (decrease) in net assets | (1,331,574) | (237,491) |
Net Assets | ||
Beginning of period | 8,966,723 | 9,204,214 |
End of period (including undistributed net investment income of $51,470 and undistributed net investment income of $82,560, respectively) | $ 7,635,149 | $ 8,966,723 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.08 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .19 | .43 |
Net realized and unrealized gain (loss) | (1.40) | 1.45 |
Total from investment operations | (1.21) | 1.88 |
Distributions from net investment income | (.27) | (.47) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.37) | (1.37) |
Net asset value, end of period | $ 14.50 | $ 17.08 |
Total Return B, C, D | (7.64)% | 11.93% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.00% A | 1.01% A |
Expenses net of fee waivers, if any | 1.00% A | 1.01% A |
Expenses net of all reductions | .99% A | 1.00% A |
Net investment income (loss) | 2.50% A | 2.62% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 7,786 | $ 4,432 |
Portfolio turnover rate F | 13% A | 12% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.06 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (1.40) | 1.46 |
Total from investment operations | (1.23) | 1.85 |
Distributions from net investment income | (.24) | (.46) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.34) | (1.36) |
Net asset value, end of period | $ 14.49 | $ 17.06 |
Total Return B, C, D | (7.74)% | 11.68% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.23% A | 1.24% A |
Expenses net of fee waivers, if any | 1.23% A | 1.24% A |
Expenses net of all reductions | 1.23% A | 1.23% A |
Net investment income (loss) | 2.26% A | 2.40% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 5,258 | $ 3,148 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.02 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .13 | .30 |
Net realized and unrealized gain (loss) | (1.41) | 1.46 |
Total from investment operations | (1.28) | 1.76 |
Distributions from net investment income | (.18) | (.41) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.28) | (1.31) |
Net asset value, end of period | $ 14.46 | $ 17.02 |
Total Return B, C, D | (8.04)% | 11.10% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.79% A | 1.79% A |
Expenses net of fee waivers, if any | 1.79% A | 1.79% A |
Expenses net of all reductions | 1.79% A | 1.78% A |
Net investment income (loss) | 1.70% A | 1.84% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,083 | $ 1,007 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.00 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .13 | .31 |
Net realized and unrealized gain (loss) | (1.40) | 1.45 |
Total from investment operations | (1.27) | 1.76 |
Distributions from net investment income | (.18) | (.43) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.28) | (1.33) |
Net asset value, end of period | $ 14.45 | $ 17.00 |
Total Return B, C, D | (7.96)% | 11.08% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.76% A | 1.75% A |
Expenses net of fee waivers, if any | 1.76% A | 1.75% A |
Expenses net of all reductions | 1.75% A | 1.74% A |
Net investment income (loss) | 1.73% A | 1.88% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 4,033 | $ 2,840 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 50%
Six months ended | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 17.10 | $ 16.60 | $ 16.28 | $ 15.58 | $ 14.95 | $ 13.01 |
Income from | ||||||
Net investme nt income (loss) D | .22 | .49 | .45 | .41 F | .33 | .40 |
Net realized and unrealized gain (loss) | (1.40) | 1.41 | .73 | .69 | .57 | 1.95 |
Total from investment operations | (1.18) | 1.90 | 1.18 | 1.10 | .90 | 2.35 |
Distributions from net investment income | (.29) | (.50) | (.45) | (.40) | (.27) | (.41) |
Distributions from net realized gain | (1.10) | (.90) | (.41) | - | - | - |
Total distributions | (1.39) | (1.40) | (.86) | (.40) | (.27) | (.41) |
Net asset value, end of period | $ 14.53 | $ 17.10 | $ 16.60 | $ 16.28 | $ 15.58 | $ 14.95 |
Total Return B, C | (7.45)% | 12.02% | 7.50% | 7.15% | 6.00% | 18.26% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .70% A | .71% | .72% | .73% | .74% | .75% |
Expenses net of fee waivers, if any | .70% A | .71% | .72% | .73% | .74% | .75% |
Expenses net of all reductions | .69% A | .70% | .71% | .72% | .73% | .74% |
Net investment income (loss) | 2.79% A | 2.93% | 2.79% | 2.55% F | 2.12% | 2.82% |
Supplemental Data | ||||||
Net assets, end of period (in | $ 7,615 | $ 8,955 | $ 9,204 | $ 10,190 | $ 10,903 | $ 10,813 |
Portfolio turnover rate E | 13% A | 12% | 65%H | 32%H | 78% | 120% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $0.04 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 2.28%.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | Years ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.11 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) D | .22 | .48 |
Net realized and unrealized gain (loss) | (1.41) | 1.46 |
Total from investment operations | (1.19) | 1.94 |
Distributions from net investment income | (.30) | (.50) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.40) | (1.40) |
Net asset value, end of period | $ 14.52 | $ 17.11 |
Total Return B, C | (7.48)% | 12.27% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .68% A | .72% A |
Expenses net of fee waivers, if any | .68% A | .72% A |
Expenses net of all reductions | .67% A | .72% A |
Net investment income (loss) | 2.82% | 2.91% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 904 | $ 186 |
Portfolio turnover rate E | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 50% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 50%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity | Investment | Investment | Investment | Expense Ratio* | |||
Fidelity Equity | Fidelity Manage-ment & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
Fidelity | Investment | Investment | Investment | Expense Ratio* | |||
Fidelity International | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | |||
Fidelity Floating | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | |||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | |||
Fidelity Tactical Income Central Fund | Fidelity Invest- | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | |||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual share holder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
performance of ADRs, futures contracts and exchange-traded funds, and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional 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 by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 243,708 | |
Unrealized depreciation | (342,470) | |
Net unrealized appreciation (depreciation) | $ (98,762) | |
Cost for federal income tax purposes | $ 7,741,206 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
4. Operating Policies - continued
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $490,280 and $985,182, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .51% of the Fund's average net assets.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 8 | $ 3 |
Class T | .25% | .25% | 11 | - |
Class B | .75% | .25% | 8 | 6 |
Class C | .75% | .25% | 16 | 13 |
$ 43 | $ 22 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 12 |
Class T | 3 |
Class B* | 1 |
Class C* | - |
$ 16 |
* 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.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 50% shares. For the period, each class paid the following transfer agent fees.
Amount | % of | |
Class A | $ 6 | .21 |
Class T | 4 | .20 |
Class B | 2 | .25 |
Class C | 4 | .22 |
Asset Manager 50% | 7,094 | .17 |
Institutional Class | 1 | .15 |
$ 7,111 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $1 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily | Weighted Average | Interest |
Borrower | $ 23,590 | 4.44% | $ 38 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $11 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of Income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $14.
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 50% operating expenses. During the period, this reimbursement reduced the class' expenses by $10.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $217 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Asset Manager 50% | $ 118 |
Semiannual Report
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $616, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
12. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 77 | $ 25 |
Class T | 57 | 24 |
Class B | 13 | 9 |
Class C | 34 | 17 |
Asset Manager 50% | 146,411 | 271,801 |
Institutional Class | 17 | 3 |
Total | $ 146,609 | $ 271,879 |
From net realized gain | ||
Class A | $ 359 | $ 12 |
Class T | 290 | 16 |
Class B | 99 | 7 |
Class C | 225 | 9 |
Asset Manager 50% | 555,464 | 485,896 |
Institutional Class | 71 | 6 |
Total | $ 556,508 | $ 485,946 |
A Distributions for Class A, Class T, Class B, Class C, and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
13. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class A | ||||
Shares sold | 306 | 290 | $ 4,736 | $ 4,808 |
Reinvestment of distributions | 27 | 2 | 426 | 37 |
Shares redeemed | (55) | (33) | (870) | (544) |
Net increase (decrease) | 278 | 259 | $ 4,292 | $ 4,301 |
Class T | ||||
Shares sold | 189 | 191 | $ 2,961 | $ 3,166 |
Reinvestment of distributions | 22 | 2 | 344 | 39 |
Shares redeemed | (33) | (8) | (507) | (140) |
Net increase (decrease) | 178 | 185 | $ 2,798 | $ 3,065 |
Semiannual Report
13. Share Transactions - continued
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class B | ||||
Shares sold | 93 | 70 | $ 1,444 | $ 1,169 |
Reinvestment of distributions | 6 | 1 | 89 | 15 |
Shares redeemed | (14) | (12) | (219) | (200) |
Net increase (decrease) | 85 | 59 | $ 1,314 | $ 984 |
Class C | ||||
Shares sold | 129 | 170 | $ 2,012 | $ 2,814 |
Reinvestment of distributions | 13 | 1 | 198 | 23 |
Shares redeemed | (30) | (4) | (466) | (64) |
Net increase (decrease) | 112 | 167 | $ 1,744 | $ 2,773 |
Asset Manager 50% | ||||
Shares sold | 16,365 | 35,520 | $ 257,333 | $ 590,109 |
Reinvestment of distributions | 43,578 | 45,244 | 682,527 | 737,377 |
Shares redeemed | (59,243) | (111,733) | (944,525) | (1,862,786) |
Net increase (decrease) | 700 | (30,969) | $ (4,665) | $ (535,300) |
Institutional Class | ||||
Shares sold | 62 | 11 | $ 1,061 | $ 185 |
Reinvestment of distributions | 6 | 1 | 87 | 10 |
Shares redeemed | (17) | (1) | (257) | (15) |
Net increase (decrease) | 51 | 11 | $ 891 | $ 180 |
A Share transactions for Class A, Class T, Class B, Class C, and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
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Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
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P.O. Box 770001
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Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
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General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
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(for the deaf and hearing impaired)
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
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Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
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Fidelity Advisor
Asset Manager SM 50% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
Class A, Class T, Class B, and Class C are classes of Fidelity
Asset Manager® 50%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 923.60 | $ 4.81 |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05 |
Class T | |||
Actual | $ 1,000.00 | $ 922.60 | $ 5.91 |
HypotheticalA | $ 1,000.00 | $ 1,018.85 | $ 6.21 |
Class B | |||
Actual | $ 1,000.00 | $ 919.60 | $ 8.59 |
HypotheticalA | $ 1,000.00 | $ 1,016.05 | $ 9.02 |
Class C | |||
Actual | $ 1,000.00 | $ 920.40 | $ 8.45 |
HypotheticalA | $ 1,000.00 | $ 1,016.20 | $ 8.87 |
Asset Manager 50% | |||
Actual | $ 1,000.00 | $ 925.50 | $ 3.37 |
HypotheticalA | $ 1,000.00 | $ 1,021.50 | $ 3.54 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 925.20 | $ 3.27 |
HypotheticalA | $ 1,000.00 | $ 1,021.60 | $ 3.44 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.00% |
Class T | 1.23% |
Class B | 1.79% |
Class C | 1.76% |
Asset Manager 50% | .70% |
Institutional Class | .68% |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.7 | 0.6 |
Procter & Gamble Co. | 0.7 | 0.6 |
Nintendo Co. Ltd. | 0.6 | 0.1 |
General Electric Co. | 0.5 | 0.6 |
JPMorgan Chase & Co. | 0.5 | 0.4 |
American International Group, Inc. | 0.5 | 0.5 |
The Coca-Cola Co. | 0.5 | 0.4 |
CVS Caremark Corp. | 0.5 | 0.2 |
PepsiCo, Inc. | 0.4 | 0.3 |
Bank of America Corp. | 0.4 | 0.4 |
5.3 | ||
Top Five Bond Issuers as of March 31, 2008 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
Fannie Mae | 13.2 | 11.2 |
Freddie Mac | 4.6 | 4.1 |
U.S. Treasury Obligations | 4.3 | 5.2 |
Government National Mortgage Association | 1.5 | 0.7 |
Wells Fargo Mortgage Backed Securities Trust | 0.4 | 0.5 |
24.0 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 46.6% | | Bond class 51.5% | ||||
| Short-Term class 2.2% | | Short-Term class* (2.3)% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
*Short-term class is not included in the pie chart.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 7.5 |
Fidelity Information Technology Central Fund | 6.7 |
Fidelity Energy Central Fund | 5.7 |
Fidelity Industrials Central Fund | 5.7 |
Fidelity Health Care Central Fund | 5.2 |
Fidelity Consumer Discretionary Central Fund | 4.5 |
Fidelity Consumer Staples Central Fund | 4.4 |
Fidelity International Equity Central Fund | 4.4 |
Fidelity Materials Central Fund | 1.9 |
Fidelity Utilities Central Fund | 1.8 |
Fidelity Telecom Services Central Fund | 1.3 |
Total Equity Central Funds | 49.1 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 38.4 |
High Yield Fixed-Income Funds | 4.3 |
Total Fixed-Income Central Funds | 42.7 |
Money Market Central Funds | 8.1 |
Other Short-Term Investments and Net Other Assets | 0.1 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 16.9% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 49.1% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 3,387,771 | $ 343,215 | ||
Fidelity Consumer Staples Central Fund (c) | 2,673,325 | 339,085 | ||
Fidelity Energy Central Fund (c) | 3,045,137 | 438,743 | ||
Fidelity Financials Central Fund (c) | 6,903,705 | 575,769 | ||
Fidelity Health Care Central Fund (c) | 3,865,298 | 395,807 | ||
Fidelity Industrials Central Fund (c) | 3,501,469 | 432,501 | ||
Fidelity Information Technology Central Fund (c) | 4,415,888 | 513,833 | ||
Fidelity International Equity Central Fund (c) | 3,895,000 | 332,166 | ||
Fidelity Materials Central Fund (c) | 1,010,037 | 142,536 | ||
Fidelity Telecom Services Central Fund (c) | 939,550 | 101,603 | ||
Fidelity Utilities Central Fund (c) | 1,165,553 | 134,167 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $3,430,123) | 3,749,425 | |||
Fixed-Income Central Funds - 42.7% | ||||
Investment Grade Fixed-Income Funds - 38.4% | ||||
Fidelity Tactical Income Central Fund (c) | 30,942,673 | 2,933,984 | ||
High Yield Fixed-Income Funds - 4.3% | ||||
Fidelity Floating Rate Central Fund (c) | 2,245,558 | 199,563 | ||
Fidelity High Income Central Fund 1 (c) | 1,379,815 | 128,033 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 327,596 | |||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $3,374,697) | 3,261,580 | |||
Money Market Central Funds - 8.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 265,153,840 | 265,154 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 350,013,442 | 350,013 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $615,167) | 615,167 | |||
U.S. Treasury Obligations - 0.2% | ||||
Principal Amount (000s) | Value (000s) | |||
U.S. Treasury Bills, yield at date of purchase 1.59% to 3.19% 4/10/08 to 6/5/08 (b) | $ 16,300 | $ 16,272 | ||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $7,436,251) | 7,642,444 | |||
NET OTHER ASSETS - (0.1)% | (7,295) | |||
NET ASSETS - 100% | $ 7,635,149 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
220 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 12,325 | $ 617 | ||
108 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 12,233 | (28) | ||
3,476 S&P 500 E-Mini Index Contracts | June 2008 | 230,111 | 5,432 | ||
103 TOPIX 150 Index Contracts (Japan) | June 2008 | 12,559 | 182 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 267,228 | $ 6,203 | |||
The face value of futures purchased as a percentage of net assets - 3.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $16,272,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 3,193 |
Fidelity Consumer Discretionary Central Fund | 2,846 |
Fidelity Consumer Staples Central Fund | 3,181 |
Fidelity Energy Central Fund | 1,675 |
Fidelity Financials Central Fund | 9,320 |
Fidelity Floating Rate Central Fund | 8,308 |
Fidelity Health Care Central Fund | 2,203 |
Fidelity High Income Central Fund 1 | 5,588 |
Fidelity Industrials Central Fund | 3,291 |
Fidelity Information Technology Central Fund | 2,031 |
Fidelity International Equity Central Fund | 1,948 |
Fidelity Materials Central Fund | 1,545 |
Fidelity Money Market Central Fund | 9,434 |
Fidelity Securities Lending Cash Central Fund | 14 |
Fidelity Tactical Income Central Fund | 86,460 |
Fidelity Telecom Services Central Fund | 1,203 |
Fidelity Utilities Central Fund | 1,539 |
Total | $ 143,779 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, |
Fidelity Consumer Discretionary | $ 412,360 | $ - | $ - | $ 343,215 | 56.8% |
Fidelity Consumer Staples Central Fund | 337,240 | - | - | 339,085 | 56.8% |
Fidelity Energy | 427,750 | - | - | 438,743 | 56.8% |
Fidelity Financials Central Fund | 765,273 | - | - | 575,769 | 56.8% |
Fidelity Floating Rate Central Fund | 271,825 | - | 52,652 | 199,563 | 8.3% |
Fidelity Health Care Central Fund | 462,483 | - | - | 395,807 | 56.8% |
Fidelity High Income Central Fund 1 | 153,712 | - | 17,798 | 128,033 | 49.2% |
Fidelity Industrials Central Fund | 473,294 | - | - | 432,501 | 56.8% |
Fidelity Information Technology | 662,781 | - | - | 513,833 | 56.8% |
Fidelity International Equity Central Fund | - | 387,418 | - | 332,166 | 43.5% |
Fidelity Materials Central Fund | 148,405 | - | - | 142,536 | 56.8% |
Fidelity Tactical Income Central Fund | 3,496,910 | 86,460 | 583,732 | 2,933,984 | 60.0% |
Fidelity Telecom Services | 143,131 | - | - | 101,603 | 56.8% |
Fidelity Utilities | 143,573 | - | - | 134,167 | 56.8% |
Total | $ 7,898,737 | $ 473,878 | $ 654,182 | $ 7,011,005 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 23.8% |
AAA,AA,A | 10.4% |
BBB | 7.4% |
BB | 3.1% |
B | 1.4% |
CCC,CC,C | 0.3% |
Not Rated | 0.4% |
Equities | 51.2% |
Short-Term Investments and Net Other Assets | 2.0% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 83.1% |
United Kingdom | 2.7% |
Bermuda | 1.7% |
Japan | 1.4% |
Canada | 1.3% |
Switzerland | 1.0% |
Germany | 1.0% |
Others (individually less than 1%) | 7.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $16,264) | $ 16,272 | |
Fidelity Central Funds (cost $7,419,987) | 7,626,172 | |
Total Investments (cost $7,436,251) | $ 7,642,444 | |
Receivable for fund shares sold | 3,494 | |
Dividends receivable | 25 | |
Distributions receivable from Fidelity Central Funds | 16,285 | |
Receivable for daily variation on futures contracts | 494 | |
Prepaid expenses | 20 | |
Other receivables | 309 | |
Total assets | 7,663,071 | |
Liabilities | ||
Payable for investments purchased | $ 12,407 | |
Payable for fund shares redeemed | 10,435 | |
Accrued management fee | 3,230 | |
Distribution fees payable | 9 | |
Other affiliated payables | 1,284 | |
Other payables and accrued expenses | 557 | |
Total liabilities | 27,922 | |
Net Assets | $ 7,635,149 | |
Net Assets consist of: | ||
Paid in capital | $ 7,777,258 | |
Undistributed net investment income | 51,470 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (405,978) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 212,399 | |
Net Assets | $ 7,635,149 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Calculation of Maximum Offering Price | $ 14.50 | |
Maximum offering price per share (100/94.25 of $14.50) | $ 15.38 | |
Class T: | $ 14.49 | |
Maximum offering price per share (100/96.50 of $14.49) | $ 15.02 | |
Class B: | $ 14.46 | |
Class C: | $ 14.45 | |
Asset Manager 50%: | $ 14.53 | |
Institutional Class: | $ 14.52 | |
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.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends | $ 98 | |
Interest | 370 | |
Income from Fidelity Central Funds | 143,779 | |
Total income | 144,247 | |
Expenses | ||
Management fee | $ 20,907 | |
Transfer agent fees | 7,111 | |
Distribution fees | 43 | |
Accounting and security lending fees | 750 | |
Custodian fees and expenses | 33 | |
Independent trustees' compensation | 17 | |
Registration fees | 53 | |
Audit | 46 | |
Legal | 45 | |
Interest | 38 | |
Miscellaneous | 30 | |
Total expenses before reductions | 29,073 | |
Expense reductions | (345) | 28,728 |
Net investment income (loss) | 115,519 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $213) | 12,302 | |
Fidelity Central Funds | (11,236) | |
Foreign currency transactions | (316) | |
Futures contracts | (30,556) | |
Total net realized gain (loss) | (29,806) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $108) | (715,866) | |
Assets and liabilities in foreign currencies | 1 | |
Futures contracts | (4,679) | |
Total change in net unrealized appreciation (depreciation) | (720,544) | |
Net gain (loss) | (750,350) | |
Net increase (decrease) in net assets resulting from operations | $ (634,831) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 115,519 | $ 267,544 |
Net realized gain (loss) | (29,806) | 291,166 |
Change in net unrealized appreciation (depreciation) | (720,544) | 485,621 |
Net increase (decrease) in net assets resulting | (634,831) | 1,044,331 |
Distributions to shareholders from net investment income | (146,609) | (271,879) |
Distributions to shareholders from net realized gain | (556,508) | (485,946) |
Total distributions | (703,117) | (757,825) |
Share transactions - net increase (decrease) | 6,374 | (523,997) |
Total increase (decrease) in net assets | (1,331,574) | (237,491) |
Net Assets | ||
Beginning of period | 8,966,723 | 9,204,214 |
End of period (including undistributed net investment income of $51,470 and undistributed net investment income of $82,560, respectively) | $ 7,635,149 | $ 8,966,723 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.08 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .19 | .43 |
Net realized and unrealized gain (loss) | (1.40) | 1.45 |
Total from investment operations | (1.21) | 1.88 |
Distributions from net investment income | (.27) | (.47) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.37) | (1.37) |
Net asset value, end of period | $ 14.50 | $ 17.08 |
Total Return B, C, D | (7.64)% | 11.93% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.00% A | 1.01% A |
Expenses net of fee waivers, if any | 1.00% A | 1.01% A |
Expenses net of all reductions | .99% A | 1.00% A |
Net investment income (loss) | 2.50% A | 2.62% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 7,786 | $ 4,432 |
Portfolio turnover rate F | 13% A | 12% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.06 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (1.40) | 1.46 |
Total from investment operations | (1.23) | 1.85 |
Distributions from net investment income | (.24) | (.46) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.34) | (1.36) |
Net asset value, end of period | $ 14.49 | $ 17.06 |
Total Return B, C, D | (7.74)% | 11.68% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.23% A | 1.24% A |
Expenses net of fee waivers, if any | 1.23% A | 1.24% A |
Expenses net of all reductions | 1.23% A | 1.23% A |
Net investment income (loss) | 2.26% A | 2.40% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 5,258 | $ 3,148 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.02 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .13 | .30 |
Net realized and unrealized gain (loss) | (1.41) | 1.46 |
Total from investment operations | (1.28) | 1.76 |
Distributions from net investment income | (.18) | (.41) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.28) | (1.31) |
Net asset value, end of period | $ 14.46 | $ 17.02 |
Total Return B, C, D | (8.04)% | 11.10% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.79% A | 1.79% A |
Expenses net of fee waivers, if any | 1.79% A | 1.79% A |
Expenses net of all reductions | 1.79% A | 1.78% A |
Net investment income (loss) | 1.70% A | 1.84% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,083 | $ 1,007 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.00 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .13 | .31 |
Net realized and unrealized gain (loss) | (1.40) | 1.45 |
Total from investment operations | (1.27) | 1.76 |
Distributions from net investment income | (.18) | (.43) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.28) | (1.33) |
Net asset value, end of period | $ 14.45 | $ 17.00 |
Total Return B, C, D | (7.96)% | 11.08% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.76% A | 1.75% A |
Expenses net of fee waivers, if any | 1.76% A | 1.75% A |
Expenses net of all reductions | 1.75% A | 1.74% A |
Net investment income (loss) | 1.73% A | 1.88% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 4,033 | $ 2,840 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 50%
Six months ended | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 17.10 | $ 16.60 | $ 16.28 | $ 15.58 | $ 14.95 | $ 13.01 |
Income from | ||||||
Net investme nt income (loss) D | .22 | .49 | .45 | .41 F | .33 | .40 |
Net realized and unrealized gain (loss) | (1.40) | 1.41 | .73 | .69 | .57 | 1.95 |
Total from investment operations | (1.18) | 1.90 | 1.18 | 1.10 | .90 | 2.35 |
Distributions from net investment income | (.29) | (.50) | (.45) | (.40) | (.27) | (.41) |
Distributions from net realized gain | (1.10) | (.90) | (.41) | - | - | - |
Total distributions | (1.39) | (1.40) | (.86) | (.40) | (.27) | (.41) |
Net asset value, end of period | $ 14.53 | $ 17.10 | $ 16.60 | $ 16.28 | $ 15.58 | $ 14.95 |
Total Return B, C | (7.45)% | 12.02% | 7.50% | 7.15% | 6.00% | 18.26% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .70% A | .71% | .72% | .73% | .74% | .75% |
Expenses net of fee waivers, if any | .70% A | .71% | .72% | .73% | .74% | .75% |
Expenses net of all reductions | .69% A | .70% | .71% | .72% | .73% | .74% |
Net investment income (loss) | 2.79% A | 2.93% | 2.79% | 2.55% F | 2.12% | 2.82% |
Supplemental Data | ||||||
Net assets, end of period (in | $ 7,615 | $ 8,955 | $ 9,204 | $ 10,190 | $ 10,903 | $ 10,813 |
Portfolio turnover rate E | 13% A | 12% | 65%H | 32%H | 78% | 120% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $0.04 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 2.28%.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | Years ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.11 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) D | .22 | .48 |
Net realized and unrealized gain (loss) | (1.41) | 1.46 |
Total from investment operations | (1.19) | 1.94 |
Distributions from net investment income | (.30) | (.50) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.40) | (1.40) |
Net asset value, end of period | $ 14.52 | $ 17.11 |
Total Return B, C | (7.48)% | 12.27% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .68% A | .72% A |
Expenses net of fee waivers, if any | .68% A | .72% A |
Expenses net of all reductions | .67% A | .72% A |
Net investment income (loss) | 2.82% | 2.91% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 904 | $ 186 |
Portfolio turnover rate E | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 50% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 50%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity | Investment | Investment | Investment | Expense Ratio* | |||
Fidelity Equity | Fidelity Manage-ment & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
Fidelity | Investment | Investment | Investment | Expense Ratio* | |||
Fidelity International | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | |||
Fidelity Floating | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | |||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | |||
Fidelity Tactical Income Central Fund | Fidelity Invest- | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | |||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual share holder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
performance of ADRs, futures contracts and exchange-traded funds, and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional 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 by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 243,708 | |
Unrealized depreciation | (342,470) | |
Net unrealized appreciation (depreciation) | $ (98,762) | |
Cost for federal income tax purposes | $ 7,741,206 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
4. Operating Policies - continued
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $490,280 and $985,182, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .51% of the Fund's average net assets.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 8 | $ 3 |
Class T | .25% | .25% | 11 | - |
Class B | .75% | .25% | 8 | 6 |
Class C | .75% | .25% | 16 | 13 |
$ 43 | $ 22 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 12 |
Class T | 3 |
Class B* | 1 |
Class C* | - |
$ 16 |
* 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.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 50% shares. For the period, each class paid the following transfer agent fees.
Amount | % of | |
Class A | $ 6 | .21 |
Class T | 4 | .20 |
Class B | 2 | .25 |
Class C | 4 | .22 |
Asset Manager 50% | 7,094 | .17 |
Institutional Class | 1 | .15 |
$ 7,111 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $1 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily | Weighted Average | Interest |
Borrower | $ 23,590 | 4.44% | $ 38 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $11 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of Income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $14.
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 50% operating expenses. During the period, this reimbursement reduced the class' expenses by $10.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $217 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Asset Manager 50% | $ 118 |
Semiannual Report
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $616, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
12. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 77 | $ 25 |
Class T | 57 | 24 |
Class B | 13 | 9 |
Class C | 34 | 17 |
Asset Manager 50% | 146,411 | 271,801 |
Institutional Class | 17 | 3 |
Total | $ 146,609 | $ 271,879 |
From net realized gain | ||
Class A | $ 359 | $ 12 |
Class T | 290 | 16 |
Class B | 99 | 7 |
Class C | 225 | 9 |
Asset Manager 50% | 555,464 | 485,896 |
Institutional Class | 71 | 6 |
Total | $ 556,508 | $ 485,946 |
A Distributions for Class A, Class T, Class B, Class C, and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
13. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class A | ||||
Shares sold | 306 | 290 | $ 4,736 | $ 4,808 |
Reinvestment of distributions | 27 | 2 | 426 | 37 |
Shares redeemed | (55) | (33) | (870) | (544) |
Net increase (decrease) | 278 | 259 | $ 4,292 | $ 4,301 |
Class T | ||||
Shares sold | 189 | 191 | $ 2,961 | $ 3,166 |
Reinvestment of distributions | 22 | 2 | 344 | 39 |
Shares redeemed | (33) | (8) | (507) | (140) |
Net increase (decrease) | 178 | 185 | $ 2,798 | $ 3,065 |
Semiannual Report
13. Share Transactions - continued
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class B | ||||
Shares sold | 93 | 70 | $ 1,444 | $ 1,169 |
Reinvestment of distributions | 6 | 1 | 89 | 15 |
Shares redeemed | (14) | (12) | (219) | (200) |
Net increase (decrease) | 85 | 59 | $ 1,314 | $ 984 |
Class C | ||||
Shares sold | 129 | 170 | $ 2,012 | $ 2,814 |
Reinvestment of distributions | 13 | 1 | 198 | 23 |
Shares redeemed | (30) | (4) | (466) | (64) |
Net increase (decrease) | 112 | 167 | $ 1,744 | $ 2,773 |
Asset Manager 50% | ||||
Shares sold | 16,365 | 35,520 | $ 257,333 | $ 590,109 |
Reinvestment of distributions | 43,578 | 45,244 | 682,527 | 737,377 |
Shares redeemed | (59,243) | (111,733) | (944,525) | (1,862,786) |
Net increase (decrease) | 700 | (30,969) | $ (4,665) | $ (535,300) |
Institutional Class | ||||
Shares sold | 62 | 11 | $ 1,061 | $ 185 |
Reinvestment of distributions | 6 | 1 | 87 | 10 |
Shares redeemed | (17) | (1) | (257) | (15) |
Net increase (decrease) | 51 | 11 | $ 891 | $ 180 |
A Share transactions for Class A, Class T, Class B, Class C, and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AAM50-USAN-0508
1.834337.101
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset ManagerSM 50% -
Institutional Class
Semiannual Report
March 31, 2008
Institutional Class is a class of
Fidelity Asset Manager® 50%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 923.60 | $ 4.81 |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05 |
Class T | |||
Actual | $ 1,000.00 | $ 922.60 | $ 5.91 |
HypotheticalA | $ 1,000.00 | $ 1,018.85 | $ 6.21 |
Class B | |||
Actual | $ 1,000.00 | $ 919.60 | $ 8.59 |
HypotheticalA | $ 1,000.00 | $ 1,016.05 | $ 9.02 |
Class C | |||
Actual | $ 1,000.00 | $ 920.40 | $ 8.45 |
HypotheticalA | $ 1,000.00 | $ 1,016.20 | $ 8.87 |
Asset Manager 50% | |||
Actual | $ 1,000.00 | $ 925.50 | $ 3.37 |
HypotheticalA | $ 1,000.00 | $ 1,021.50 | $ 3.54 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 925.20 | $ 3.27 |
HypotheticalA | $ 1,000.00 | $ 1,021.60 | $ 3.44 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.00% |
Class T | 1.23% |
Class B | 1.79% |
Class C | 1.76% |
Asset Manager 50% | .70% |
Institutional Class | .68% |
In addition to the expenses noted above, the Fund also indirectly bears it proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.7 | 0.6 |
Procter & Gamble Co. | 0.7 | 0.6 |
Nintendo Co. Ltd. | 0.6 | 0.1 |
General Electric Co. | 0.5 | 0.6 |
JPMorgan Chase & Co. | 0.5 | 0.4 |
American International Group, Inc. | 0.5 | 0.5 |
The Coca-Cola Co. | 0.5 | 0.4 |
CVS Caremark Corp. | 0.5 | 0.2 |
PepsiCo, Inc. | 0.4 | 0.3 |
Bank of America Corp. | 0.4 | 0.4 |
5.3 | ||
Top Five Bond Issuers as of March 31, 2008 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
Fannie Mae | 13.2 | 11.2 |
Freddie Mac | 4.6 | 4.1 |
U.S. Treasury Obligations | 4.3 | 5.2 |
Government National Mortgage Association | 1.5 | 0.7 |
Wells Fargo Mortgage Backed Securities Trust | 0.4 | 0.5 |
24.0 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 46.6% | | Bond class 51.5% | ||||
| Short-Term class 2.2% | | Short-Term class* (2.3)% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
*Short-term class is not included in the pie chart.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 7.5 |
Fidelity Information Technology Central Fund | 6.7 |
Fidelity Energy Central Fund | 5.7 |
Fidelity Industrials Central Fund | 5.7 |
Fidelity Health Care Central Fund | 5.2 |
Fidelity Consumer Discretionary Central Fund | 4.5 |
Fidelity Consumer Staples Central Fund | 4.4 |
Fidelity International Equity Central Fund | 4.4 |
Fidelity Materials Central Fund | 1.9 |
Fidelity Utilities Central Fund | 1.8 |
Fidelity Telecom Services Central Fund | 1.3 |
Total Equity Central Funds | 49.1 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 38.4 |
High Yield Fixed-Income Funds | 4.3 |
Total Fixed-Income Central Funds | 42.7 |
Money Market Central Funds | 8.1 |
Other Short-Term Investments and Net Other Assets | 0.1 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 16.9% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 49.1% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 3,387,771 | $ 343,215 | ||
Fidelity Consumer Staples Central Fund (c) | 2,673,325 | 339,085 | ||
Fidelity Energy Central Fund (c) | 3,045,137 | 438,743 | ||
Fidelity Financials Central Fund (c) | 6,903,705 | 575,769 | ||
Fidelity Health Care Central Fund (c) | 3,865,298 | 395,807 | ||
Fidelity Industrials Central Fund (c) | 3,501,469 | 432,501 | ||
Fidelity Information Technology Central Fund (c) | 4,415,888 | 513,833 | ||
Fidelity International Equity Central Fund (c) | 3,895,000 | 332,166 | ||
Fidelity Materials Central Fund (c) | 1,010,037 | 142,536 | ||
Fidelity Telecom Services Central Fund (c) | 939,550 | 101,603 | ||
Fidelity Utilities Central Fund (c) | 1,165,553 | 134,167 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $3,430,123) | 3,749,425 | |||
Fixed-Income Central Funds - 42.7% | ||||
Investment Grade Fixed-Income Funds - 38.4% | ||||
Fidelity Tactical Income Central Fund (c) | 30,942,673 | 2,933,984 | ||
High Yield Fixed-Income Funds - 4.3% | ||||
Fidelity Floating Rate Central Fund (c) | 2,245,558 | 199,563 | ||
Fidelity High Income Central Fund 1 (c) | 1,379,815 | 128,033 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 327,596 | |||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $3,374,697) | 3,261,580 | |||
Money Market Central Funds - 8.1% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 265,153,840 | 265,154 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 350,013,442 | 350,013 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $615,167) | 615,167 | |||
U.S. Treasury Obligations - 0.2% | ||||
Principal Amount (000s) | Value (000s) | |||
U.S. Treasury Bills, yield at date of purchase 1.59% to 3.19% 4/10/08 to 6/5/08 (b) | $ 16,300 | $ 16,272 | ||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $7,436,251) | 7,642,444 | |||
NET OTHER ASSETS - (0.1)% | (7,295) | |||
NET ASSETS - 100% | $ 7,635,149 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
220 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 12,325 | $ 617 | ||
108 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 12,233 | (28) | ||
3,476 S&P 500 E-Mini Index Contracts | June 2008 | 230,111 | 5,432 | ||
103 TOPIX 150 Index Contracts (Japan) | June 2008 | 12,559 | 182 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 267,228 | $ 6,203 | |||
The face value of futures purchased as a percentage of net assets - 3.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $16,272,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 3,193 |
Fidelity Consumer Discretionary Central Fund | 2,846 |
Fidelity Consumer Staples Central Fund | 3,181 |
Fidelity Energy Central Fund | 1,675 |
Fidelity Financials Central Fund | 9,320 |
Fidelity Floating Rate Central Fund | 8,308 |
Fidelity Health Care Central Fund | 2,203 |
Fidelity High Income Central Fund 1 | 5,588 |
Fidelity Industrials Central Fund | 3,291 |
Fidelity Information Technology Central Fund | 2,031 |
Fidelity International Equity Central Fund | 1,948 |
Fidelity Materials Central Fund | 1,545 |
Fidelity Money Market Central Fund | 9,434 |
Fidelity Securities Lending Cash Central Fund | 14 |
Fidelity Tactical Income Central Fund | 86,460 |
Fidelity Telecom Services Central Fund | 1,203 |
Fidelity Utilities Central Fund | 1,539 |
Total | $ 143,779 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, |
Fidelity Consumer Discretionary | $ 412,360 | $ - | $ - | $ 343,215 | 56.8% |
Fidelity Consumer Staples Central Fund | 337,240 | - | - | 339,085 | 56.8% |
Fidelity Energy | 427,750 | - | - | 438,743 | 56.8% |
Fidelity Financials Central Fund | 765,273 | - | - | 575,769 | 56.8% |
Fidelity Floating Rate Central Fund | 271,825 | - | 52,652 | 199,563 | 8.3% |
Fidelity Health Care Central Fund | 462,483 | - | - | 395,807 | 56.8% |
Fidelity High Income Central Fund 1 | 153,712 | - | 17,798 | 128,033 | 49.2% |
Fidelity Industrials Central Fund | 473,294 | - | - | 432,501 | 56.8% |
Fidelity Information Technology | 662,781 | - | - | 513,833 | 56.8% |
Fidelity International Equity Central Fund | - | 387,418 | - | 332,166 | 43.5% |
Fidelity Materials Central Fund | 148,405 | - | - | 142,536 | 56.8% |
Fidelity Tactical Income Central Fund | 3,496,910 | 86,460 | 583,732 | 2,933,984 | 60.0% |
Fidelity Telecom Services | 143,131 | - | - | 101,603 | 56.8% |
Fidelity Utilities | 143,573 | - | - | 134,167 | 56.8% |
Total | $ 7,898,737 | $ 473,878 | $ 654,182 | $ 7,011,005 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 23.8% |
AAA,AA,A | 10.4% |
BBB | 7.4% |
BB | 3.1% |
B | 1.4% |
CCC,CC,C | 0.3% |
Not Rated | 0.4% |
Equities | 51.2% |
Short-Term Investments and Net Other Assets | 2.0% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 83.1% |
United Kingdom | 2.7% |
Bermuda | 1.7% |
Japan | 1.4% |
Canada | 1.3% |
Switzerland | 1.0% |
Germany | 1.0% |
Others (individually less than 1%) | 7.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $16,264) | $ 16,272 | |
Fidelity Central Funds (cost $7,419,987) | 7,626,172 | |
Total Investments (cost $7,436,251) | $ 7,642,444 | |
Receivable for fund shares sold | 3,494 | |
Dividends receivable | 25 | |
Distributions receivable from Fidelity Central Funds | 16,285 | |
Receivable for daily variation on futures contracts | 494 | |
Prepaid expenses | 20 | |
Other receivables | 309 | |
Total assets | 7,663,071 | |
Liabilities | ||
Payable for investments purchased | $ 12,407 | |
Payable for fund shares redeemed | 10,435 | |
Accrued management fee | 3,230 | |
Distribution fees payable | 9 | |
Other affiliated payables | 1,284 | |
Other payables and accrued expenses | 557 | |
Total liabilities | 27,922 | |
Net Assets | $ 7,635,149 | |
Net Assets consist of: | ||
Paid in capital | $ 7,777,258 | |
Undistributed net investment income | 51,470 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (405,978) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 212,399 | |
Net Assets | $ 7,635,149 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | March 31, 2008 (Unaudited) | |
Calculation of Maximum Offering Price | $ 14.50 | |
Maximum offering price per share (100/94.25 of $14.50) | $ 15.38 | |
Class T: | $ 14.49 | |
Maximum offering price per share (100/96.50 of $14.49) | $ 15.02 | |
Class B: | $ 14.46 | |
Class C: | $ 14.45 | |
Asset Manager 50%: | $ 14.53 | |
Institutional Class: | $ 14.52 | |
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.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends | $ 98 | |
Interest | 370 | |
Income from Fidelity Central Funds | 143,779 | |
Total income | 144,247 | |
Expenses | ||
Management fee | $ 20,907 | |
Transfer agent fees | 7,111 | |
Distribution fees | 43 | |
Accounting and security lending fees | 750 | |
Custodian fees and expenses | 33 | |
Independent trustees' compensation | 17 | |
Registration fees | 53 | |
Audit | 46 | |
Legal | 45 | |
Interest | 38 | |
Miscellaneous | 30 | |
Total expenses before reductions | 29,073 | |
Expense reductions | (345) | 28,728 |
Net investment income (loss) | 115,519 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $213) | 12,302 | |
Fidelity Central Funds | (11,236) | |
Foreign currency transactions | (316) | |
Futures contracts | (30,556) | |
Total net realized gain (loss) | (29,806) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $108) | (715,866) | |
Assets and liabilities in foreign currencies | 1 | |
Futures contracts | (4,679) | |
Total change in net unrealized appreciation (depreciation) | (720,544) | |
Net gain (loss) | (750,350) | |
Net increase (decrease) in net assets resulting from operations | $ (634,831) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 115,519 | $ 267,544 |
Net realized gain (loss) | (29,806) | 291,166 |
Change in net unrealized appreciation (depreciation) | (720,544) | 485,621 |
Net increase (decrease) in net assets resulting | (634,831) | 1,044,331 |
Distributions to shareholders from net investment income | (146,609) | (271,879) |
Distributions to shareholders from net realized gain | (556,508) | (485,946) |
Total distributions | (703,117) | (757,825) |
Share transactions - net increase (decrease) | 6,374 | (523,997) |
Total increase (decrease) in net assets | (1,331,574) | (237,491) |
Net Assets | ||
Beginning of period | 8,966,723 | 9,204,214 |
End of period (including undistributed net investment income of $51,470 and undistributed net investment income of $82,560, respectively) | $ 7,635,149 | $ 8,966,723 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.08 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .19 | .43 |
Net realized and unrealized gain (loss) | (1.40) | 1.45 |
Total from investment operations | (1.21) | 1.88 |
Distributions from net investment income | (.27) | (.47) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.37) | (1.37) |
Net asset value, end of period | $ 14.50 | $ 17.08 |
Total Return B, C, D | (7.64)% | 11.93% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.00% A | 1.01% A |
Expenses net of fee waivers, if any | 1.00% A | 1.01% A |
Expenses net of all reductions | .99% A | 1.00% A |
Net investment income (loss) | 2.50% A | 2.62% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 7,786 | $ 4,432 |
Portfolio turnover rate F | 13% A | 12% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.06 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .17 | .39 |
Net realized and unrealized gain (loss) | (1.40) | 1.46 |
Total from investment operations | (1.23) | 1.85 |
Distributions from net investment income | (.24) | (.46) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.34) | (1.36) |
Net asset value, end of period | $ 14.49 | $ 17.06 |
Total Return B, C, D | (7.74)% | 11.68% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.23% A | 1.24% A |
Expenses net of fee waivers, if any | 1.23% A | 1.24% A |
Expenses net of all reductions | 1.23% A | 1.23% A |
Net investment income (loss) | 2.26% A | 2.40% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 5,258 | $ 3,148 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.02 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .13 | .30 |
Net realized and unrealized gain (loss) | (1.41) | 1.46 |
Total from investment operations | (1.28) | 1.76 |
Distributions from net investment income | (.18) | (.41) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.28) | (1.31) |
Net asset value, end of period | $ 14.46 | $ 17.02 |
Total Return B, C, D | (8.04)% | 11.10% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.79% A | 1.79% A |
Expenses net of fee waivers, if any | 1.79% A | 1.79% A |
Expenses net of all reductions | 1.79% A | 1.78% A |
Net investment income (loss) | 1.70% A | 1.84% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,083 | $ 1,007 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | Years ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.00 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) E | .13 | .31 |
Net realized and unrealized gain (loss) | (1.40) | 1.45 |
Total from investment operations | (1.27) | 1.76 |
Distributions from net investment income | (.18) | (.43) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.28) | (1.33) |
Net asset value, end of period | $ 14.45 | $ 17.00 |
Total Return B, C, D | (7.96)% | 11.08% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.76% A | 1.75% A |
Expenses net of fee waivers, if any | 1.76% A | 1.75% A |
Expenses net of all reductions | 1.75% A | 1.74% A |
Net investment income (loss) | 1.73% A | 1.88% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 4,033 | $ 2,840 |
Portfolio turnover rate F | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 50%
Six months ended | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 17.10 | $ 16.60 | $ 16.28 | $ 15.58 | $ 14.95 | $ 13.01 |
Income from | ||||||
Net investme nt income (loss) D | .22 | .49 | .45 | .41 F | .33 | .40 |
Net realized and unrealized gain (loss) | (1.40) | 1.41 | .73 | .69 | .57 | 1.95 |
Total from investment operations | (1.18) | 1.90 | 1.18 | 1.10 | .90 | 2.35 |
Distributions from net investment income | (.29) | (.50) | (.45) | (.40) | (.27) | (.41) |
Distributions from net realized gain | (1.10) | (.90) | (.41) | - | - | - |
Total distributions | (1.39) | (1.40) | (.86) | (.40) | (.27) | (.41) |
Net asset value, end of period | $ 14.53 | $ 17.10 | $ 16.60 | $ 16.28 | $ 15.58 | $ 14.95 |
Total Return B, C | (7.45)% | 12.02% | 7.50% | 7.15% | 6.00% | 18.26% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .70% A | .71% | .72% | .73% | .74% | .75% |
Expenses net of fee waivers, if any | .70% A | .71% | .72% | .73% | .74% | .75% |
Expenses net of all reductions | .69% A | .70% | .71% | .72% | .73% | .74% |
Net investment income (loss) | 2.79% A | 2.93% | 2.79% | 2.55% F | 2.12% | 2.82% |
Supplemental Data | ||||||
Net assets, end of period (in | $ 7,615 | $ 8,955 | $ 9,204 | $ 10,190 | $ 10,903 | $ 10,813 |
Portfolio turnover rate E | 13% A | 12% | 65%H | 32%H | 78% | 120% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $0.04 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 2.28%.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | Years ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 17.11 | $ 16.57 |
Income from Investment Operations | ||
Net investment income (loss) D | .22 | .48 |
Net realized and unrealized gain (loss) | (1.41) | 1.46 |
Total from investment operations | (1.19) | 1.94 |
Distributions from net investment income | (.30) | (.50) |
Distributions from net realized gain | (1.10) | (.90) |
Total distributions | (1.40) | (1.40) |
Net asset value, end of period | $ 14.52 | $ 17.11 |
Total Return B, C | (7.48)% | 12.27% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .68% A | .72% A |
Expenses net of fee waivers, if any | .68% A | .72% A |
Expenses net of all reductions | .67% A | .72% A |
Net investment income (loss) | 2.82% | 2.91% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 904 | $ 186 |
Portfolio turnover rate E | 13% A | 12% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 50% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 50%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity | Investment | Investment | Investment | Expense Ratio* | |||
Fidelity Equity | Fidelity Manage-ment & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
Fidelity | Investment | Investment | Investment | Expense Ratio* | |||
Fidelity International | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | |||
Fidelity Floating | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | |||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | |||
Fidelity Tactical Income Central Fund | Fidelity Invest- | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | |||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual share holder report.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
performance of ADRs, futures contracts and exchange-traded funds, and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional 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 by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 243,708 | |
Unrealized depreciation | (342,470) | |
Net unrealized appreciation (depreciation) | $ (98,762) | |
Cost for federal income tax purposes | $ 7,741,206 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
4. Operating Policies - continued
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $490,280 and $985,182, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .51% of the Fund's average net assets.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 8 | $ 3 |
Class T | .25% | .25% | 11 | - |
Class B | .75% | .25% | 8 | 6 |
Class C | .75% | .25% | 16 | 13 |
$ 43 | $ 22 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 12 |
Class T | 3 |
Class B* | 1 |
Class C* | - |
$ 16 |
* 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.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 50% shares. For the period, each class paid the following transfer agent fees.
Amount | % of | |
Class A | $ 6 | .21 |
Class T | 4 | .20 |
Class B | 2 | .25 |
Class C | 4 | .22 |
Asset Manager 50% | 7,094 | .17 |
Institutional Class | 1 | .15 |
$ 7,111 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $1 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily | Weighted Average | Interest |
Borrower | $ 23,590 | 4.44% | $ 38 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $11 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of Income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $14.
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 50% operating expenses. During the period, this reimbursement reduced the class' expenses by $10.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $217 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Asset Manager 50% | $ 118 |
Semiannual Report
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $616, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
12. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 77 | $ 25 |
Class T | 57 | 24 |
Class B | 13 | 9 |
Class C | 34 | 17 |
Asset Manager 50% | 146,411 | 271,801 |
Institutional Class | 17 | 3 |
Total | $ 146,609 | $ 271,879 |
From net realized gain | ||
Class A | $ 359 | $ 12 |
Class T | 290 | 16 |
Class B | 99 | 7 |
Class C | 225 | 9 |
Asset Manager 50% | 555,464 | 485,896 |
Institutional Class | 71 | 6 |
Total | $ 556,508 | $ 485,946 |
A Distributions for Class A, Class T, Class B, Class C, and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
13. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class A | ||||
Shares sold | 306 | 290 | $ 4,736 | $ 4,808 |
Reinvestment of distributions | 27 | 2 | 426 | 37 |
Shares redeemed | (55) | (33) | (870) | (544) |
Net increase (decrease) | 278 | 259 | $ 4,292 | $ 4,301 |
Class T | ||||
Shares sold | 189 | 191 | $ 2,961 | $ 3,166 |
Reinvestment of distributions | 22 | 2 | 344 | 39 |
Shares redeemed | (33) | (8) | (507) | (140) |
Net increase (decrease) | 178 | 185 | $ 2,798 | $ 3,065 |
Semiannual Report
13. Share Transactions - continued
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class B | ||||
Shares sold | 93 | 70 | $ 1,444 | $ 1,169 |
Reinvestment of distributions | 6 | 1 | 89 | 15 |
Shares redeemed | (14) | (12) | (219) | (200) |
Net increase (decrease) | 85 | 59 | $ 1,314 | $ 984 |
Class C | ||||
Shares sold | 129 | 170 | $ 2,012 | $ 2,814 |
Reinvestment of distributions | 13 | 1 | 198 | 23 |
Shares redeemed | (30) | (4) | (466) | (64) |
Net increase (decrease) | 112 | 167 | $ 1,744 | $ 2,773 |
Asset Manager 50% | ||||
Shares sold | 16,365 | 35,520 | $ 257,333 | $ 590,109 |
Reinvestment of distributions | 43,578 | 45,244 | 682,527 | 737,377 |
Shares redeemed | (59,243) | (111,733) | (944,525) | (1,862,786) |
Net increase (decrease) | 700 | (30,969) | $ (4,665) | $ (535,300) |
Institutional Class | ||||
Shares sold | 62 | 11 | $ 1,061 | $ 185 |
Reinvestment of distributions | 6 | 1 | 87 | 10 |
Shares redeemed | (17) | (1) | (257) | (15) |
Net increase (decrease) | 51 | 11 | $ 891 | $ 180 |
A Share transactions for Class A, Class T, Class B, Class C, and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AAM50I-USAN-0508
1.834327.101
(Fidelity Investment logo)(registered trademark)
Fidelity®
Asset Manager® 60%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, http://visit www.fidelity.com (search for "proxy voting guidelines") 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.
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/holdings or http://www.advisor.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 892.80 | $ 5.66B * |
HypotheticalA | $ 1,000.00 | $ 1,018.75 | $ 6.31C * |
Class T | |||
Actual | $ 1,000.00 | $ 891.10 | $ 6.78B * |
HypotheticalA | $ 1,000.00 | $ 1,017.50 | $ 7.57C * |
Class B | |||
Actual | $ 1,000.00 | $ 889.10 | $ 9.03B * |
HypotheticalA | $ 1,000.00 | $ 1,015.00 | $ 10.08C * |
Class C | |||
Actual | $ 1,000.00 | $ 889.10 | $ 9.03B * |
HypotheticalA | $ 1,000.00 | $ 1,015.00 | $ 10.08C * |
Asset Manager 60% | |||
Actual | $ 1,000.00 | $ 893.20 | $ 4.53B * |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05C * |
Institutional Class | |||
Actual | $ 1,000.00 | $ 893.20 | $ 4.53B * |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05C * |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.25% * |
Class T | 1.50% * |
Class B | 2.00% * |
Class C | 2.00% * |
Asset Manager 60% | 1.00% * |
Institutional Class | 1.00% * |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
* If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | 1.10% | |
Actual | $ 4.98 | |
HypotheticalA | $ 5.55 | |
Class T | 1.35% | |
Actual | $ 6.11 | |
HypotheticalA | $ 6.81 | |
Class B | 1.85% | |
Actual | $ 8.36 | |
HypotheticalA | $ 9.32 | |
Class C | 1.85% | |
Actual | $ 8.36 | |
HypotheticalA | $ 9.32 | |
Asset Manager 60% | .85% | |
Actual | $ 3.85 | |
HypotheticalA | $ 4.29 | |
Institutional Class | .85% | |
Actual | $ 3.85 | |
HypotheticalA | $ 4.29 |
A 5% return per year before expenses
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.8 |
Procter & Gamble Co. | 0.8 |
Nintendo Co. Ltd. | 0.6 |
General Electric Co. | 0.6 |
JPMorgan Chase & Co. | 0.6 |
American International Group, Inc. | 0.5 |
The Coca-Cola Co. | 0.5 |
CVS Caremark Corp. | 0.5 |
PepsiCo, Inc. | 0.4 |
Bank of America Corp. | 0.4 |
5.7 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class and Equity Futures 61.2% | ||
| Bond class 39.8% | ||
 | Short-term class* (1.0)% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
* Short-term class is not included in the pie chart.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 8.6 |
Fidelity International Equity Central Fund | 8.2 |
Fidelity Information Technology Central Fund | 7.7 |
Fidelity Energy Central Fund | 6.5 |
Fidelity Industrials Central Fund | 6.5 |
Fidelity Health Care Central Fund | 5.9 |
Fidelity Consumer Discretionary Central Fund | 5.1 |
Fidelity Consumer Staples Central Fund | 5.1 |
Fidelity Materials Central Fund | 2.1 |
Fidelity Utilities Central Fund | 2.0 |
Fidelity Telecom Services Central Fund | 1.5 |
Total Equity Central Funds | 59.2 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 31.9 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 35.9 |
Money Market Central Funds | 3.4 |
Other Short-Term Investments and Net Other Assets | 1.5 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 20.7% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 59.2% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 6,590 | $ 667,633 | ||
Fidelity Consumer Staples Central Fund (c) | 5,200 | 659,568 | ||
Fidelity Energy Central Fund (c) | 5,923 | 853,386 | ||
Fidelity Financials Central Fund (c) | 13,430 | 1,120,062 | ||
Fidelity Health Care Central Fund (c) | 7,519 | 769,946 | ||
Fidelity Industrials Central Fund (c) | 6,811 | 841,295 | ||
Fidelity Information Technology Central Fund (c) | 8,590 | 999,532 | ||
Fidelity International Equity Central Fund (c) | 12,489 | 1,065,062 | ||
Fidelity Materials Central Fund (c) | 1,964 | 277,160 | ||
Fidelity Telecom Services Central Fund (c) | 1,827 | 197,572 | ||
Fidelity Utilities Central Fund (c) | 2,267 | 260,954 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $8,604,773) | 7,712,170 | |||
Fixed-Income Central Funds - 35.9% | ||||
High Yield Fixed-Income Funds - 4.0% | ||||
Fidelity Floating Rate Central Fund (c) | 2,456 | 218,265 | ||
Fidelity High Income Central Fund 1 (c) | 3,223 | 299,062 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 517,327 | |||
Investment Grade Fixed-Income Funds - 31.9% | ||||
Fidelity Tactical Income Central Fund (c) | 43,846 | 4,157,476 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $4,777,124) | 4,674,803 | |||
Money Market Central Funds - 3.4% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 450,604 | 450,604 | ||
U.S. Treasury Obligations - 0.4% | ||||
Principal | ||||
U.S. Treasury Bills, yield at date of purchase 0.63% to 3.09% 4/10/08 to 6/5/08 (b) | $ 50,000 | 49,924 | ||
Cash Equivalents - 0.2% | ||||
Maturity | Value | |||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 26,001 | $ 26,000 | ||
TOTAL INVESTMENT PORTFOLIO - 99.1% (Cost $13,908,394) | 12,913,501 | |||
NET OTHER ASSETS - 0.9% | 115,068 | |||
NET ASSETS - 100% | $ 13,028,569 | |||
Futures Contracts | |||||
Expiration | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
7 S&P 500 E-Mini Index Contracts | June 2008 | $ 463,400 | $ 10,971 | ||
The face value of futures purchased as a percentage of net assets - 3.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $49,924. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$26,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 17,794 |
Barclays Capital, Inc. | 61 |
Lehman Brothers, Inc. | 8,145 |
$ 26,000 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 26,068 |
Fidelity Consumer Discretionary Central Fund | 3,903 |
Fidelity Consumer Staples Central Fund | 4,435 |
Fidelity Energy Central Fund | 2,150 |
Fidelity Financials Central Fund | 11,803 |
Fidelity Floating Rate Central Fund | 6,815 |
Fidelity Health Care Central Fund | 3,001 |
Fidelity High Income Central Fund 1 | 6,599 |
Fund | Income earned |
Fidelity Industrials Central Fund | $ 4,383 |
Fidelity Information Technology Central Fund | 2,915 |
Fidelity International Equity Central Fund | 6,137 |
Fidelity Materials Central Fund | 1,929 |
Fidelity Tactical Income Central Fund | 59,957 |
Fidelity Telecom Services Central Fund | 1,269 |
Fidelity Utilities Central Fund | 1,951 |
Total | $ 143,315 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales | Value, | % ownership, |
Fidelity Consumer Discretionary Central Fund | $ - | $ 750,518 | $ - | $ 667,633 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 657,323 | - | 659,568 | 0.1% |
Fidelity Energy Central Fund | - | 850,205 | - | 853,386 | 0.1% |
Fidelity Financials Central Fund | - | 1,349,538 | - | 1,120,062 | 0.1% |
Fidelity Floating Rate Central Fund | - | 236,977 | - | 218,265 | 0.0% |
Fidelity Health Care Central Fund | - | 888,460 | - | 769,946 | 0.1% |
Fidelity High Income Central Fund 1 | - | 309,183 | - | 299,062 | 0.1% |
Fidelity Industrials Central Fund | - | 888,748 | - | 841,295 | 0.1% |
Fidelity Information Technology Central Fund | - | 1,199,448 | - | 999,532 | 0.1% |
Fidelity International Equity Central Fund | - | 1,207,104 | - | 1,065,062 | 0.1% |
Fidelity Materials Central Fund | - | 284,013 | - | 277,160 | 0.1% |
Fidelity Tactical Income Central Fund | - | 4,435,449 | 199,973 | 4,157,476 | 0.1% |
Fidelity Telecom Services Central Fund | - | 245,528 | - | 197,572 | 0.1% |
Fidelity Utilities Central Fund | - | 283,887 | - | 260,954 | 0.1% |
Total | $ - | $ 13,586,381 | $ 199,973 | $ 12,386,973 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 19.8% |
AAA,AA,A | 8.7% |
BBB | 6.4% |
BB | 2.6% |
B | 1.3% |
CCC,CC,C | 0.3% |
Not Rated | 0.1% |
Equities | 61.1% |
Short-Term Investments and Net Other Assets | (0.3)% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follow: (Unaudited) Percentages are adjusted for the effect of futures contacts, if applicable. |
United States of America | 79.3% |
United Kingdom | 3.0% |
Bermuda | 1.9% |
Japan | 1.7% |
France | 1.4% |
Switzerland | 1.4% |
Germany | 1.3% |
Cayman Islands | 1.3% |
Canada | 1.1% |
Others (individually less than 1%) | 7.6% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $26,000) - See accompanying schedule: Unaffiliated issuers (cost $75,893) | $ 75,924 | |
Fidelity Central Funds (cost $13,832,501) | 12,837,577 | |
Total Investments (cost $13,908,394) | $ 12,913,501 | |
Cash | 376 | |
Receivable for fund shares sold | 170,403 | |
Distributions receivable from Fidelity Central Funds | 21,198 | |
Receivable for daily variation on futures contracts | 1,785 | |
Prepaid expenses | 38,333 | |
Receivable from investment adviser for expense reductions | 8,410 | |
Total assets | 13,154,006 | |
Liabilities | ||
Payable for investments purchased | $ 99,700 | |
Accrued management fee | 5,844 | |
Distribution fees payable | 2,167 | |
Other affiliated payables | 2,123 | |
Other payables and accrued expenses | 15,603 | |
Total liabilities | 125,437 | |
Net Assets | $ 13,028,569 | |
Net Assets consist of: | ||
Paid in capital | $ 14,034,211 | |
Undistributed net investment income | 55,285 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (77,005) | |
Net unrealized appreciation (depreciation) on investments | (983,922) | |
Net Assets | $ 13,028,569 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price Class A: | $ 8.89 | |
Maximum offering price per share (100/94.25 of $8.89) | $ 9.43 | |
Class T: | $ 8.88 | |
Maximum offering price per share (100/96.50 of $8.88) | $ 9.20 | |
Class B: | $ 8.87 | |
Class C: | $ 8.87 | |
Asset Manager 60%: | $ 8.89 | |
Institutional Class: | $ 8.89 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 3,765 | |
Income from Fidelity Central Funds | 143,315 | |
Total income | 147,080 | |
Expenses | ||
Management fee | $ 24,948 | |
Transfer agent fees | 7,491 | |
Distribution fees | 11,144 | |
Accounting fees and expenses | 2,204 | |
Custodian fees and expenses | 2,513 | |
Independent trustees' compensation | 14 | |
Registration fees | 40,187 | |
Audit | 19,721 | |
Miscellaneous | 2,008 | |
Total expenses before reductions | 110,230 | |
Expense reductions | (55,136) | 55,094 |
Net investment income (loss) | 91,986 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (4,527) | |
Foreign currency transactions | (925) | |
Futures contracts | (71,553) | |
Total net realized gain (loss) | (77,005) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (994,893) | |
Futures contracts | 10,971 | |
Total change in net unrealized appreciation (depreciation) | (983,922) | |
Net gain (loss) | (1,060,927) | |
Net increase (decrease) in net assets resulting from operations | $ (968,941) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 91,986 |
Net realized gain (loss) | (77,005) |
Change in net unrealized appreciation (depreciation) | (983,922) |
Net increase (decrease) in net assets resulting | (968,941) |
Distributions to shareholders from net investment income | (36,701) |
Share transactions - net increase (decrease) | 14,034,211 |
Total increase (decrease) in net assets | 13,028,569 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $55,285) | $ 13,028,569 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.07) |
Distributions from net investment income | (.04) |
Net asset value, end of period | $ 8.89 |
Total Return B, C, D | (10.72)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.47% A |
Expenses net of fee waivers, if any | 1.25% A |
Expenses net of all reductions | 1.25% A |
Net investment income (loss) | 2.06% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,185 |
Portfolio turnover rate F | 2% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .08 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.09) |
Distributions from net investment income | (.03) |
Net asset value, end of period | $ 8.88 |
Total Return B, C, D | (10.89)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.73% A |
Expenses net of fee waivers, if any | 1.50% A |
Expenses net of all reductions | 1.50% A |
Net investment income (loss) | 1.82% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 863 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .06 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.11) |
Distributions from net investment income | (.02) |
Net asset value, end of period | $ 8.87 |
Total Return B, C, D | (11.09)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 3.22% A |
Expenses net of fee waivers, if any | 2.00% A |
Expenses net of all reductions | 2.00% A |
Net investment income (loss) | 1.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 904 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .06 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.11) |
Distributions from net investment income | (.02) |
Net asset value, end of period | $ 8.87 |
Total Return B, C, D | (11.09)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 3.22% A |
Expenses net of fee waivers, if any | 2.00% A |
Expenses net of all reductions | 2.00% A |
Net investment income (loss) | 1.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,005 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 60%
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .10 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.06) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 8.89 |
Total Return B, C | (10.68)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 2.28% A |
Expenses net of fee waivers, if any | 1.00% A |
Expenses net of all reductions | 1.00% A |
Net investment income (loss) | 2.36% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 8,185 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .10 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.06) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 8.89 |
Total Return B, C | (10.68)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 2.21% A |
Expenses net of fee waivers, if any | 1.00% A |
Expenses net of all reductions | 1.00% A |
Net investment income (loss) | 2.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 887 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 60% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 60%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense Ratio* | ||||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
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2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense Ratio* | ||||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | ||||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
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Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities
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3. Significant Accounting Policies - continued
Security Valuation - continued
markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly
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Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Expenses - continued
bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 35,157 | |
Unrealized depreciation | (1,030,050) | |
Net unrealized appreciation (depreciation) | $ (994,893) | |
Cost for federal income tax purposes | $ 13,908,394 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
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3. Significant Accounting Policies - continued
New Accounting Pronouncements - continued
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of
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Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Futures Contracts - continued
the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $13,586,381 and $199,973, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 1,685 | $ 949 |
Class T | .25% | .25% | 1,908 | 1,794 |
Class B | .75% | .25% | 3,708 | 3,674 |
Class C | .75% | .25% | 3,843 | 3,668 |
$ 11,144 | $ 10,085 |
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6. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 1,222 |
Class T | 267 |
$ 1,489 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 1,055 | .16 |
Class T | 631 | .17 |
Class B | 556 | .15 |
Class C | 564 | .15 |
Asset Manager 60% | 4,105 | .19 |
Institutional Class | 580 | .14 |
$ 7,491 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
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Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.25% | $ 8,148 |
Class T | 1.50% | 4,695 |
Class B | 2.00% | 4,510 |
Class C | 2.00% | 4,667 |
Asset Manager 60% | 1.00% | 28,194 |
Institutional Class | 1.00% | 4,918 |
$ 55,132 |
* Effective May 1, 2008 the expense limitation will be changed to 1.10%, 1.35%, 1.85%, 1.85%, .85% and .85% for Class A, Class T, Class B, Class C, Asset Manager 60% and Institutional Class, respectively.
In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Institutional Class | $ 4 |
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9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, FMR or its affiliates were the owners of record of 33% of the total outstanding shares of the fund.
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 7,307 |
Class T | 2,841 |
Class B | 1,840 |
Class C | 1,840 |
Asset Manager 60% | 18,398 |
Institutional Class | 4,475 |
Total | $ 36,701 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
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Notes to Financial Statements (Unaudited) - continued
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended | Six months ended | |
Class A | ||
Shares sold | 240,433 | $ 2,294,035 |
Reinvestment of distributions | 761 | 7,307 |
Shares redeemed | (107,883) | (970,384) |
Net increase (decrease) | 133,311 | $ 1,330,958 |
Class T | ||
Shares sold | 100,585 | $ 987,410 |
Reinvestment of distributions | 283 | 2,720 |
Shares redeemed | (3,744) | (33,713) |
Net increase (decrease) | 97,124 | $ 956,417 |
Class B | ||
Shares sold | 101,729 | $ 993,235 |
Reinvestment of distributions | 192 | 1,840 |
Shares redeemed | (10) | (88) |
Net increase (decrease) | 101,911 | $ 994,987 |
Class C | ||
Shares sold | 113,030 | $ 1,095,474 |
Reinvestment of distributions | 192 | 1,840 |
Net increase (decrease) | 113,222 | $ 1,097,314 |
Asset Manager 60% | ||
Shares sold | 1,027,913 | $ 9,634,668 |
Reinvestment of distributions | 1,882 | 18,064 |
Shares redeemed | (109,475) | (986,182) |
Net increase (decrease) | 920,320 | $ 8,666,550 |
Institutional Class | ||
Shares sold | 99,434 | $ 985,010 |
Reinvestment of distributions | 466 | 4,475 |
Shares redeemed | (167) | (1,500) |
Net increase (decrease) | 99,733 | $ 987,985 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
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Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 60%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
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Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 60% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
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Fidelity Advisor
Asset Manager SM 60% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
Class A, Class T, Class B,
and Class C are classes of
Fidelity Asset Manager® 60%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 892.80 | $ 5.66B * |
HypotheticalA | $ 1,000.00 | $ 1,018.75 | $ 6.31C * |
Class T | |||
Actual | $ 1,000.00 | $ 891.10 | $ 6.78B * |
HypotheticalA | $ 1,000.00 | $ 1,017.50 | $ 7.57C * |
Class B | |||
Actual | $ 1,000.00 | $ 889.10 | $ 9.03B * |
HypotheticalA | $ 1,000.00 | $ 1,015.00 | $ 10.08C * |
Class C | |||
Actual | $ 1,000.00 | $ 889.10 | $ 9.03B * |
HypotheticalA | $ 1,000.00 | $ 1,015.00 | $ 10.08C * |
Asset Manager 60% | |||
Actual | $ 1,000.00 | $ 893.20 | $ 4.53B * |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05C * |
Institutional Class | |||
Actual | $ 1,000.00 | $ 893.20 | $ 4.53B * |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05C * |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.25% * |
Class T | 1.50% * |
Class B | 2.00% * |
Class C | 2.00% * |
Asset Manager 60% | 1.00% * |
Institutional Class | 1.00% * |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
* If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | 1.10% | |
Actual | $ 4.98 | |
HypotheticalA | $ 5.55 | |
Class T | 1.35% | |
Actual | $ 6.11 | |
HypotheticalA | $ 6.81 | |
Class B | 1.85% | |
Actual | $ 8.36 | |
HypotheticalA | $ 9.32 | |
Class C | 1.85% | |
Actual | $ 8.36 | |
HypotheticalA | $ 9.32 | |
Asset Manager 60% | .85% | |
Actual | $ 3.85 | |
HypotheticalA | $ 4.29 | |
Institutional Class | .85% | |
Actual | $ 3.85 | |
HypotheticalA | $ 4.29 |
A 5% return per year before expenses
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.8 |
Procter & Gamble Co. | 0.8 |
Nintendo Co. Ltd. | 0.6 |
General Electric Co. | 0.6 |
JPMorgan Chase & Co. | 0.6 |
American International Group, Inc. | 0.5 |
The Coca-Cola Co. | 0.5 |
CVS Caremark Corp. | 0.5 |
PepsiCo, Inc. | 0.4 |
Bank of America Corp. | 0.4 |
5.7 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class and Equity Futures 61.2% | ||
| Bond class 39.8% | ||
| Short-term class* (1.0)% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
* Short-term class is not included in the pie chart.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 8.6 |
Fidelity International Equity Central Fund | 8.2 |
Fidelity Information Technology Central Fund | 7.7 |
Fidelity Energy Central Fund | 6.5 |
Fidelity Industrials Central Fund | 6.5 |
Fidelity Health Care Central Fund | 5.9 |
Fidelity Consumer Discretionary Central Fund | 5.1 |
Fidelity Consumer Staples Central Fund | 5.1 |
Fidelity Materials Central Fund | 2.1 |
Fidelity Utilities Central Fund | 2.0 |
Fidelity Telecom Services Central Fund | 1.5 |
Total Equity Central Funds | 59.2 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 31.9 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 35.9 |
Money Market Central Funds | 3.4 |
Other Short-Term Investments and Net Other Assets | 1.5 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 20.7% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 59.2% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 6,590 | $ 667,633 | ||
Fidelity Consumer Staples Central Fund (c) | 5,200 | 659,568 | ||
Fidelity Energy Central Fund (c) | 5,923 | 853,386 | ||
Fidelity Financials Central Fund (c) | 13,430 | 1,120,062 | ||
Fidelity Health Care Central Fund (c) | 7,519 | 769,946 | ||
Fidelity Industrials Central Fund (c) | 6,811 | 841,295 | ||
Fidelity Information Technology Central Fund (c) | 8,590 | 999,532 | ||
Fidelity International Equity Central Fund (c) | 12,489 | 1,065,062 | ||
Fidelity Materials Central Fund (c) | 1,964 | 277,160 | ||
Fidelity Telecom Services Central Fund (c) | 1,827 | 197,572 | ||
Fidelity Utilities Central Fund (c) | 2,267 | 260,954 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $8,604,773) | 7,712,170 | |||
Fixed-Income Central Funds - 35.9% | ||||
High Yield Fixed-Income Funds - 4.0% | ||||
Fidelity Floating Rate Central Fund (c) | 2,456 | 218,265 | ||
Fidelity High Income Central Fund 1 (c) | 3,223 | 299,062 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 517,327 | |||
Investment Grade Fixed-Income Funds - 31.9% | ||||
Fidelity Tactical Income Central Fund (c) | 43,846 | 4,157,476 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $4,777,124) | 4,674,803 | |||
Money Market Central Funds - 3.4% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 450,604 | 450,604 | ||
U.S. Treasury Obligations - 0.4% | ||||
Principal | ||||
U.S. Treasury Bills, yield at date of purchase 0.63% to 3.09% 4/10/08 to 6/5/08 (b) | $ 50,000 | 49,924 | ||
Cash Equivalents - 0.2% | ||||
Maturity | Value | |||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 26,001 | $ 26,000 | ||
TOTAL INVESTMENT PORTFOLIO - 99.1% (Cost $13,908,394) | 12,913,501 | |||
NET OTHER ASSETS - 0.9% | 115,068 | |||
NET ASSETS - 100% | $ 13,028,569 | |||
Futures Contracts | |||||
Expiration | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
7 S&P 500 E-Mini Index Contracts | June 2008 | $ 463,400 | $ 10,971 | ||
The face value of futures purchased as a percentage of net assets - 3.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $49,924. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$26,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 17,794 |
Barclays Capital, Inc. | 61 |
Lehman Brothers, Inc. | 8,145 |
$ 26,000 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 26,068 |
Fidelity Consumer Discretionary Central Fund | 3,903 |
Fidelity Consumer Staples Central Fund | 4,435 |
Fidelity Energy Central Fund | 2,150 |
Fidelity Financials Central Fund | 11,803 |
Fidelity Floating Rate Central Fund | 6,815 |
Fidelity Health Care Central Fund | 3,001 |
Fidelity High Income Central Fund 1 | 6,599 |
Fund | Income earned |
Fidelity Industrials Central Fund | $ 4,383 |
Fidelity Information Technology Central Fund | 2,915 |
Fidelity International Equity Central Fund | 6,137 |
Fidelity Materials Central Fund | 1,929 |
Fidelity Tactical Income Central Fund | 59,957 |
Fidelity Telecom Services Central Fund | 1,269 |
Fidelity Utilities Central Fund | 1,951 |
Total | $ 143,315 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales | Value, | % ownership, |
Fidelity Consumer Discretionary Central Fund | $ - | $ 750,518 | $ - | $ 667,633 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 657,323 | - | 659,568 | 0.1% |
Fidelity Energy Central Fund | - | 850,205 | - | 853,386 | 0.1% |
Fidelity Financials Central Fund | - | 1,349,538 | - | 1,120,062 | 0.1% |
Fidelity Floating Rate Central Fund | - | 236,977 | - | 218,265 | 0.0% |
Fidelity Health Care Central Fund | - | 888,460 | - | 769,946 | 0.1% |
Fidelity High Income Central Fund 1 | - | 309,183 | - | 299,062 | 0.1% |
Fidelity Industrials Central Fund | - | 888,748 | - | 841,295 | 0.1% |
Fidelity Information Technology Central Fund | - | 1,199,448 | - | 999,532 | 0.1% |
Fidelity International Equity Central Fund | - | 1,207,104 | - | 1,065,062 | 0.1% |
Fidelity Materials Central Fund | - | 284,013 | - | 277,160 | 0.1% |
Fidelity Tactical Income Central Fund | - | 4,435,449 | 199,973 | 4,157,476 | 0.1% |
Fidelity Telecom Services Central Fund | - | 245,528 | - | 197,572 | 0.1% |
Fidelity Utilities Central Fund | - | 283,887 | - | 260,954 | 0.1% |
Total | $ - | $ 13,586,381 | $ 199,973 | $ 12,386,973 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 19.8% |
AAA,AA,A | 8.7% |
BBB | 6.4% |
BB | 2.6% |
B | 1.3% |
CCC,CC,C | 0.3% |
Not Rated | 0.1% |
Equities | 61.1% |
Short-Term Investments and Net Other Assets | (0.3)% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follow: (Unaudited) Percentages are adjusted for the effect of futures contacts, if applicable. |
United States of America | 79.3% |
United Kingdom | 3.0% |
Bermuda | 1.9% |
Japan | 1.7% |
France | 1.4% |
Switzerland | 1.4% |
Germany | 1.3% |
Cayman Islands | 1.3% |
Canada | 1.1% |
Others (individually less than 1%) | 7.6% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $26,000) - See accompanying schedule: Unaffiliated issuers (cost $75,893) | $ 75,924 | |
Fidelity Central Funds (cost $13,832,501) | 12,837,577 | |
Total Investments (cost $13,908,394) | $ 12,913,501 | |
Cash | 376 | |
Receivable for fund shares sold | 170,403 | |
Distributions receivable from Fidelity Central Funds | 21,198 | |
Receivable for daily variation on futures contracts | 1,785 | |
Prepaid expenses | 38,333 | |
Receivable from investment adviser for expense reductions | 8,410 | |
Total assets | 13,154,006 | |
Liabilities | ||
Payable for investments purchased | $ 99,700 | |
Accrued management fee | 5,844 | |
Distribution fees payable | 2,167 | |
Other affiliated payables | 2,123 | |
Other payables and accrued expenses | 15,603 | |
Total liabilities | 125,437 | |
Net Assets | $ 13,028,569 | |
Net Assets consist of: | ||
Paid in capital | $ 14,034,211 | |
Undistributed net investment income | 55,285 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (77,005) | |
Net unrealized appreciation (depreciation) on investments | (983,922) | |
Net Assets | $ 13,028,569 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price Class A: | $ 8.89 | |
Maximum offering price per share (100/94.25 of $8.89) | $ 9.43 | |
Class T: | $ 8.88 | |
Maximum offering price per share (100/96.50 of $8.88) | $ 9.20 | |
Class B: | $ 8.87 | |
Class C: | $ 8.87 | |
Asset Manager 60%: | $ 8.89 | |
Institutional Class: | $ 8.89 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 3,765 | |
Income from Fidelity Central Funds | 143,315 | |
Total income | 147,080 | |
Expenses | ||
Management fee | $ 24,948 | |
Transfer agent fees | 7,491 | |
Distribution fees | 11,144 | |
Accounting fees and expenses | 2,204 | |
Custodian fees and expenses | 2,513 | |
Independent trustees' compensation | 14 | |
Registration fees | 40,187 | |
Audit | 19,721 | |
Miscellaneous | 2,008 | |
Total expenses before reductions | 110,230 | |
Expense reductions | (55,136) | 55,094 |
Net investment income (loss) | 91,986 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (4,527) | |
Foreign currency transactions | (925) | |
Futures contracts | (71,553) | |
Total net realized gain (loss) | (77,005) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (994,893) | |
Futures contracts | 10,971 | |
Total change in net unrealized appreciation (depreciation) | (983,922) | |
Net gain (loss) | (1,060,927) | |
Net increase (decrease) in net assets resulting from operations | $ (968,941) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 91,986 |
Net realized gain (loss) | (77,005) |
Change in net unrealized appreciation (depreciation) | (983,922) |
Net increase (decrease) in net assets resulting | (968,941) |
Distributions to shareholders from net investment income | (36,701) |
Share transactions - net increase (decrease) | 14,034,211 |
Total increase (decrease) in net assets | 13,028,569 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $55,285) | $ 13,028,569 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.07) |
Distributions from net investment income | (.04) |
Net asset value, end of period | $ 8.89 |
Total Return B, C, D | (10.72)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.47% A |
Expenses net of fee waivers, if any | 1.25% A |
Expenses net of all reductions | 1.25% A |
Net investment income (loss) | 2.06% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,185 |
Portfolio turnover rate F | 2% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .08 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.09) |
Distributions from net investment income | (.03) |
Net asset value, end of period | $ 8.88 |
Total Return B, C, D | (10.89)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.73% A |
Expenses net of fee waivers, if any | 1.50% A |
Expenses net of all reductions | 1.50% A |
Net investment income (loss) | 1.82% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 863 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .06 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.11) |
Distributions from net investment income | (.02) |
Net asset value, end of period | $ 8.87 |
Total Return B, C, D | (11.09)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 3.22% A |
Expenses net of fee waivers, if any | 2.00% A |
Expenses net of all reductions | 2.00% A |
Net investment income (loss) | 1.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 904 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .06 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.11) |
Distributions from net investment income | (.02) |
Net asset value, end of period | $ 8.87 |
Total Return B, C, D | (11.09)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 3.22% A |
Expenses net of fee waivers, if any | 2.00% A |
Expenses net of all reductions | 2.00% A |
Net investment income (loss) | 1.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,005 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 60%
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .10 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.06) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 8.89 |
Total Return B, C | (10.68)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 2.28% A |
Expenses net of fee waivers, if any | 1.00% A |
Expenses net of all reductions | 1.00% A |
Net investment income (loss) | 2.36% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 8,185 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .10 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.06) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 8.89 |
Total Return B, C | (10.68)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 2.21% A |
Expenses net of fee waivers, if any | 1.00% A |
Expenses net of all reductions | 1.00% A |
Net investment income (loss) | 2.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 887 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 60% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 60%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense Ratio* | ||||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense Ratio* | ||||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | ||||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Expenses - continued
bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 35,157 | |
Unrealized depreciation | (1,030,050) | |
Net unrealized appreciation (depreciation) | $ (994,893) | |
Cost for federal income tax purposes | $ 13,908,394 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
Semiannual Report
3. Significant Accounting Policies - continued
New Accounting Pronouncements - continued
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Futures Contracts - continued
the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $13,586,381 and $199,973, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 1,685 | $ 949 |
Class T | .25% | .25% | 1,908 | 1,794 |
Class B | .75% | .25% | 3,708 | 3,674 |
Class C | .75% | .25% | 3,843 | 3,668 |
$ 11,144 | $ 10,085 |
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 1,222 |
Class T | 267 |
$ 1,489 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 1,055 | .16 |
Class T | 631 | .17 |
Class B | 556 | .15 |
Class C | 564 | .15 |
Asset Manager 60% | 4,105 | .19 |
Institutional Class | 580 | .14 |
$ 7,491 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.25% | $ 8,148 |
Class T | 1.50% | 4,695 |
Class B | 2.00% | 4,510 |
Class C | 2.00% | 4,667 |
Asset Manager 60% | 1.00% | 28,194 |
Institutional Class | 1.00% | 4,918 |
$ 55,132 |
* Effective May 1, 2008 the expense limitation will be changed to 1.10%, 1.35%, 1.85%, 1.85%, .85% and .85% for Class A, Class T, Class B, Class C, Asset Manager 60% and Institutional Class, respectively.
In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Institutional Class | $ 4 |
Semiannual Report
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, FMR or its affiliates were the owners of record of 33% of the total outstanding shares of the fund.
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 7,307 |
Class T | 2,841 |
Class B | 1,840 |
Class C | 1,840 |
Asset Manager 60% | 18,398 |
Institutional Class | 4,475 |
Total | $ 36,701 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended | Six months ended | |
Class A | ||
Shares sold | 240,433 | $ 2,294,035 |
Reinvestment of distributions | 761 | 7,307 |
Shares redeemed | (107,883) | (970,384) |
Net increase (decrease) | 133,311 | $ 1,330,958 |
Class T | ||
Shares sold | 100,585 | $ 987,410 |
Reinvestment of distributions | 283 | 2,720 |
Shares redeemed | (3,744) | (33,713) |
Net increase (decrease) | 97,124 | $ 956,417 |
Class B | ||
Shares sold | 101,729 | $ 993,235 |
Reinvestment of distributions | 192 | 1,840 |
Shares redeemed | (10) | (88) |
Net increase (decrease) | 101,911 | $ 994,987 |
Class C | ||
Shares sold | 113,030 | $ 1,095,474 |
Reinvestment of distributions | 192 | 1,840 |
Net increase (decrease) | 113,222 | $ 1,097,314 |
Asset Manager 60% | ||
Shares sold | 1,027,913 | $ 9,634,668 |
Reinvestment of distributions | 1,882 | 18,064 |
Shares redeemed | (109,475) | (986,182) |
Net increase (decrease) | 920,320 | $ 8,666,550 |
Institutional Class | ||
Shares sold | 99,434 | $ 985,010 |
Reinvestment of distributions | 466 | 4,475 |
Shares redeemed | (167) | (1,500) |
Net increase (decrease) | 99,733 | $ 987,985 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 60%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 60% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
ASAN-USAN-0508
1.849974.100
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset ManagerSM 60% -
Institutional Class
Semiannual Report
March 31, 2008
Institutional Class is a class of
Fidelity Asset Manager® 60%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 9, 2007 to March 31, 2008). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 892.80 | $ 5.66B * |
HypotheticalA | $ 1,000.00 | $ 1,018.75 | $ 6.31C * |
Class T | |||
Actual | $ 1,000.00 | $ 891.10 | $ 6.78B * |
HypotheticalA | $ 1,000.00 | $ 1,017.50 | $ 7.57C * |
Class B | |||
Actual | $ 1,000.00 | $ 889.10 | $ 9.03B * |
HypotheticalA | $ 1,000.00 | $ 1,015.00 | $ 10.08C * |
Class C | |||
Actual | $ 1,000.00 | $ 889.10 | $ 9.03B * |
HypotheticalA | $ 1,000.00 | $ 1,015.00 | $ 10.08C * |
Asset Manager 60% | |||
Actual | $ 1,000.00 | $ 893.20 | $ 4.53B * |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05C * |
Institutional Class | |||
Actual | $ 1,000.00 | $ 893.20 | $ 4.53B * |
HypotheticalA | $ 1,000.00 | $ 1,020.00 | $ 5.05C * |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 175/366 (to reflect the period October 9, 2007 to March 31, 2008).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Semiannual Report
Shareholder Expense Example - continued
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.25% * |
Class T | 1.50% * |
Class B | 2.00% * |
Class C | 2.00% * |
Asset Manager 60% | 1.00% * |
Institutional Class | 1.00% * |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
* If changes to voluntary expense limitations, effective May 1, 2008 had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
Annualized Expense Ratio | Expenses Paid | |
Class A | 1.10% | |
Actual | $ 4.98 | |
HypotheticalA | $ 5.55 | |
Class T | 1.35% | |
Actual | $ 6.11 | |
HypotheticalA | $ 6.81 | |
Class B | 1.85% | |
Actual | $ 8.36 | |
HypotheticalA | $ 9.32 | |
Class C | 1.85% | |
Actual | $ 8.36 | |
HypotheticalA | $ 9.32 | |
Asset Manager 60% | .85% | |
Actual | $ 3.85 | |
HypotheticalA | $ 4.29 | |
Institutional Class | .85% | |
Actual | $ 3.85 | |
HypotheticalA | $ 4.29 |
A 5% return per year before expenses
Semiannual Report
Investment Summary (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | |
% of fund's | |
Cisco Systems, Inc. | 0.8 |
Procter & Gamble Co. | 0.8 |
Nintendo Co. Ltd. | 0.6 |
General Electric Co. | 0.6 |
JPMorgan Chase & Co. | 0.6 |
American International Group, Inc. | 0.5 |
The Coca-Cola Co. | 0.5 |
CVS Caremark Corp. | 0.5 |
PepsiCo, Inc. | 0.4 |
Bank of America Corp. | 0.4 |
5.7 | |
Asset Allocation (% of fund's net assets) | |||
As of March 31, 2008 | |||
| Stock class and Equity Futures 61.2% | ||
| Bond class 39.8% | ||
| Short-term class* (1.0)% | ||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
* Short-term class is not included in the pie chart.
Semiannual Report
Investment Summary (Unaudited) - continued
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 8.6 |
Fidelity International Equity Central Fund | 8.2 |
Fidelity Information Technology Central Fund | 7.7 |
Fidelity Energy Central Fund | 6.5 |
Fidelity Industrials Central Fund | 6.5 |
Fidelity Health Care Central Fund | 5.9 |
Fidelity Consumer Discretionary Central Fund | 5.1 |
Fidelity Consumer Staples Central Fund | 5.1 |
Fidelity Materials Central Fund | 2.1 |
Fidelity Utilities Central Fund | 2.0 |
Fidelity Telecom Services Central Fund | 1.5 |
Total Equity Central Funds | 59.2 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 31.9 |
High Yield Fixed-Income Funds | 4.0 |
Total Fixed-Income Central Funds | 35.9 |
Money Market Central Funds | 3.4 |
Other Short-Term Investments and Net Other Assets | 1.5 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 20.7% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 59.2% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 6,590 | $ 667,633 | ||
Fidelity Consumer Staples Central Fund (c) | 5,200 | 659,568 | ||
Fidelity Energy Central Fund (c) | 5,923 | 853,386 | ||
Fidelity Financials Central Fund (c) | 13,430 | 1,120,062 | ||
Fidelity Health Care Central Fund (c) | 7,519 | 769,946 | ||
Fidelity Industrials Central Fund (c) | 6,811 | 841,295 | ||
Fidelity Information Technology Central Fund (c) | 8,590 | 999,532 | ||
Fidelity International Equity Central Fund (c) | 12,489 | 1,065,062 | ||
Fidelity Materials Central Fund (c) | 1,964 | 277,160 | ||
Fidelity Telecom Services Central Fund (c) | 1,827 | 197,572 | ||
Fidelity Utilities Central Fund (c) | 2,267 | 260,954 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $8,604,773) | 7,712,170 | |||
Fixed-Income Central Funds - 35.9% | ||||
High Yield Fixed-Income Funds - 4.0% | ||||
Fidelity Floating Rate Central Fund (c) | 2,456 | 218,265 | ||
Fidelity High Income Central Fund 1 (c) | 3,223 | 299,062 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 517,327 | |||
Investment Grade Fixed-Income Funds - 31.9% | ||||
Fidelity Tactical Income Central Fund (c) | 43,846 | 4,157,476 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $4,777,124) | 4,674,803 | |||
Money Market Central Funds - 3.4% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 450,604 | 450,604 | ||
U.S. Treasury Obligations - 0.4% | ||||
Principal | ||||
U.S. Treasury Bills, yield at date of purchase 0.63% to 3.09% 4/10/08 to 6/5/08 (b) | $ 50,000 | 49,924 | ||
Cash Equivalents - 0.2% | ||||
Maturity | Value | |||
Investments in repurchase agreements in a joint trading account at 1.46%, dated 3/31/08 due 4/1/08 (Collateralized by U.S. Government Obligations) # | $ 26,001 | $ 26,000 | ||
TOTAL INVESTMENT PORTFOLIO - 99.1% (Cost $13,908,394) | 12,913,501 | |||
NET OTHER ASSETS - 0.9% | 115,068 | |||
NET ASSETS - 100% | $ 13,028,569 | |||
Futures Contracts | |||||
Expiration | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
7 S&P 500 E-Mini Index Contracts | June 2008 | $ 463,400 | $ 10,971 | ||
The face value of futures purchased as a percentage of net assets - 3.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $49,924. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$26,000 due 4/01/08 at 1.46% | |
BNP Paribas Securities Corp. | $ 17,794 |
Barclays Capital, Inc. | 61 |
Lehman Brothers, Inc. | 8,145 |
$ 26,000 | |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 26,068 |
Fidelity Consumer Discretionary Central Fund | 3,903 |
Fidelity Consumer Staples Central Fund | 4,435 |
Fidelity Energy Central Fund | 2,150 |
Fidelity Financials Central Fund | 11,803 |
Fidelity Floating Rate Central Fund | 6,815 |
Fidelity Health Care Central Fund | 3,001 |
Fidelity High Income Central Fund 1 | 6,599 |
Fund | Income earned |
Fidelity Industrials Central Fund | $ 4,383 |
Fidelity Information Technology Central Fund | 2,915 |
Fidelity International Equity Central Fund | 6,137 |
Fidelity Materials Central Fund | 1,929 |
Fidelity Tactical Income Central Fund | 59,957 |
Fidelity Telecom Services Central Fund | 1,269 |
Fidelity Utilities Central Fund | 1,951 |
Total | $ 143,315 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales | Value, | % ownership, |
Fidelity Consumer Discretionary Central Fund | $ - | $ 750,518 | $ - | $ 667,633 | 0.1% |
Fidelity Consumer Staples Central Fund | - | 657,323 | - | 659,568 | 0.1% |
Fidelity Energy Central Fund | - | 850,205 | - | 853,386 | 0.1% |
Fidelity Financials Central Fund | - | 1,349,538 | - | 1,120,062 | 0.1% |
Fidelity Floating Rate Central Fund | - | 236,977 | - | 218,265 | 0.0% |
Fidelity Health Care Central Fund | - | 888,460 | - | 769,946 | 0.1% |
Fidelity High Income Central Fund 1 | - | 309,183 | - | 299,062 | 0.1% |
Fidelity Industrials Central Fund | - | 888,748 | - | 841,295 | 0.1% |
Fidelity Information Technology Central Fund | - | 1,199,448 | - | 999,532 | 0.1% |
Fidelity International Equity Central Fund | - | 1,207,104 | - | 1,065,062 | 0.1% |
Fidelity Materials Central Fund | - | 284,013 | - | 277,160 | 0.1% |
Fidelity Tactical Income Central Fund | - | 4,435,449 | 199,973 | 4,157,476 | 0.1% |
Fidelity Telecom Services Central Fund | - | 245,528 | - | 197,572 | 0.1% |
Fidelity Utilities Central Fund | - | 283,887 | - | 260,954 | 0.1% |
Total | $ - | $ 13,586,381 | $ 199,973 | $ 12,386,973 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 19.8% |
AAA,AA,A | 8.7% |
BBB | 6.4% |
BB | 2.6% |
B | 1.3% |
CCC,CC,C | 0.3% |
Not Rated | 0.1% |
Equities | 61.1% |
Short-Term Investments and Net Other Assets | (0.3)% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follow: (Unaudited) Percentages are adjusted for the effect of futures contacts, if applicable. |
United States of America | 79.3% |
United Kingdom | 3.0% |
Bermuda | 1.9% |
Japan | 1.7% |
France | 1.4% |
Switzerland | 1.4% |
Germany | 1.3% |
Cayman Islands | 1.3% |
Canada | 1.1% |
Others (individually less than 1%) | 7.6% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $26,000) - See accompanying schedule: Unaffiliated issuers (cost $75,893) | $ 75,924 | |
Fidelity Central Funds (cost $13,832,501) | 12,837,577 | |
Total Investments (cost $13,908,394) | $ 12,913,501 | |
Cash | 376 | |
Receivable for fund shares sold | 170,403 | |
Distributions receivable from Fidelity Central Funds | 21,198 | |
Receivable for daily variation on futures contracts | 1,785 | |
Prepaid expenses | 38,333 | |
Receivable from investment adviser for expense reductions | 8,410 | |
Total assets | 13,154,006 | |
Liabilities | ||
Payable for investments purchased | $ 99,700 | |
Accrued management fee | 5,844 | |
Distribution fees payable | 2,167 | |
Other affiliated payables | 2,123 | |
Other payables and accrued expenses | 15,603 | |
Total liabilities | 125,437 | |
Net Assets | $ 13,028,569 | |
Net Assets consist of: | ||
Paid in capital | $ 14,034,211 | |
Undistributed net investment income | 55,285 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (77,005) | |
Net unrealized appreciation (depreciation) on investments | (983,922) | |
Net Assets | $ 13,028,569 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price Class A: | $ 8.89 | |
Maximum offering price per share (100/94.25 of $8.89) | $ 9.43 | |
Class T: | $ 8.88 | |
Maximum offering price per share (100/96.50 of $8.88) | $ 9.20 | |
Class B: | $ 8.87 | |
Class C: | $ 8.87 | |
Asset Manager 60%: | $ 8.89 | |
Institutional Class: | $ 8.89 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period | ||
(Unaudited) | ||
Investment Income | ||
Interest | $ 3,765 | |
Income from Fidelity Central Funds | 143,315 | |
Total income | 147,080 | |
Expenses | ||
Management fee | $ 24,948 | |
Transfer agent fees | 7,491 | |
Distribution fees | 11,144 | |
Accounting fees and expenses | 2,204 | |
Custodian fees and expenses | 2,513 | |
Independent trustees' compensation | 14 | |
Registration fees | 40,187 | |
Audit | 19,721 | |
Miscellaneous | 2,008 | |
Total expenses before reductions | 110,230 | |
Expense reductions | (55,136) | 55,094 |
Net investment income (loss) | 91,986 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (4,527) | |
Foreign currency transactions | (925) | |
Futures contracts | (71,553) | |
Total net realized gain (loss) | (77,005) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (994,893) | |
Futures contracts | 10,971 | |
Total change in net unrealized appreciation (depreciation) | (983,922) | |
Net gain (loss) | (1,060,927) | |
Net increase (decrease) in net assets resulting from operations | $ (968,941) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
(Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 91,986 |
Net realized gain (loss) | (77,005) |
Change in net unrealized appreciation (depreciation) | (983,922) |
Net increase (decrease) in net assets resulting | (968,941) |
Distributions to shareholders from net investment income | (36,701) |
Share transactions - net increase (decrease) | 14,034,211 |
Total increase (decrease) in net assets | 13,028,569 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $55,285) | $ 13,028,569 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .09 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.07) |
Distributions from net investment income | (.04) |
Net asset value, end of period | $ 8.89 |
Total Return B, C, D | (10.72)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.47% A |
Expenses net of fee waivers, if any | 1.25% A |
Expenses net of all reductions | 1.25% A |
Net investment income (loss) | 2.06% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,185 |
Portfolio turnover rate F | 2% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .08 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.09) |
Distributions from net investment income | (.03) |
Net asset value, end of period | $ 8.88 |
Total Return B, C, D | (10.89)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 2.73% A |
Expenses net of fee waivers, if any | 1.50% A |
Expenses net of all reductions | 1.50% A |
Net investment income (loss) | 1.82% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 863 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .06 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.11) |
Distributions from net investment income | (.02) |
Net asset value, end of period | $ 8.87 |
Total Return B, C, D | (11.09)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 3.22% A |
Expenses net of fee waivers, if any | 2.00% A |
Expenses net of all reductions | 2.00% A |
Net investment income (loss) | 1.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 904 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | .06 |
Net realized and unrealized gain (loss) | (1.17) |
Total from investment operations | (1.11) |
Distributions from net investment income | (.02) |
Net asset value, end of period | $ 8.87 |
Total Return B, C, D | (11.09)% |
Ratios to Average Net Assets H | |
Expenses before reductions | 3.22% A |
Expenses net of fee waivers, if any | 2.00% A |
Expenses net of all reductions | 2.00% A |
Net investment income (loss) | 1.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,005 |
Portfolio turnover rate F | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 9, 2007 (commencement of operations) to March 31, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 60%
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .10 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.06) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 8.89 |
Total Return B, C | (10.68)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 2.28% A |
Expenses net of fee waivers, if any | 1.00% A |
Expenses net of all reductions | 1.00% A |
Net investment income (loss) | 2.36% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 8,185 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .10 |
Net realized and unrealized gain (loss) | (1.16) |
Total from investment operations | (1.06) |
Distributions from net investment income | (.05) |
Net asset value, end of period | $ 8.89 |
Total Return B, C | (10.68)% |
Ratios to Average Net Assets G | |
Expenses before reductions | 2.21% A |
Expenses net of fee waivers, if any | 1.00% A |
Expenses net of all reductions | 1.00% A |
Net investment income (loss) | 2.32% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 887 |
Portfolio turnover rate E | 2% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 9, 2007 (commencement of operations) to March 31, 2008.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 60% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 60%, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense Ratio* | ||||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense Ratio* | ||||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | ||||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Expenses - continued
bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions expected to be taken in the initial filing of the Fund's federal tax return. 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 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 35,157 | |
Unrealized depreciation | (1,030,050) | |
Net unrealized appreciation (depreciation) | $ (994,893) | |
Cost for federal income tax purposes | $ 13,908,394 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
Semiannual Report
3. Significant Accounting Policies - continued
New Accounting Pronouncements - continued
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the affect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Futures Contracts - continued
the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $13,586,381 and $199,973, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 1,685 | $ 949 |
Class T | .25% | .25% | 1,908 | 1,794 |
Class B | .75% | .25% | 3,708 | 3,674 |
Class C | .75% | .25% | 3,843 | 3,668 |
$ 11,144 | $ 10,085 |
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 1,222 |
Class T | 267 |
$ 1,489 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 1,055 | .16 |
Class T | 631 | .17 |
Class B | 556 | .15 |
Class C | 564 | .15 |
Asset Manager 60% | 4,105 | .19 |
Institutional Class | 580 | .14 |
$ 7,491 |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.25% | $ 8,148 |
Class T | 1.50% | 4,695 |
Class B | 2.00% | 4,510 |
Class C | 2.00% | 4,667 |
Asset Manager 60% | 1.00% | 28,194 |
Institutional Class | 1.00% | 4,918 |
$ 55,132 |
* Effective May 1, 2008 the expense limitation will be changed to 1.10%, 1.35%, 1.85%, 1.85%, .85% and .85% for Class A, Class T, Class B, Class C, Asset Manager 60% and Institutional Class, respectively.
In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Institutional Class | $ 4 |
Semiannual Report
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, FMR or its affiliates were the owners of record of 33% of the total outstanding shares of the fund.
10. Credit Risk.
The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers that hold mortgage securities, including securities backed by subprime mortgage loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by subprime mortgage loans have resulted in increased volatility of market price and periods of illiquidity that have adversely impacted the valuation of certain issuers of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | |
From net investment income | |
Class A | $ 7,307 |
Class T | 2,841 |
Class B | 1,840 |
Class C | 1,840 |
Asset Manager 60% | 18,398 |
Institutional Class | 4,475 |
Total | $ 36,701 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
Six months ended | Six months ended | |
Class A | ||
Shares sold | 240,433 | $ 2,294,035 |
Reinvestment of distributions | 761 | 7,307 |
Shares redeemed | (107,883) | (970,384) |
Net increase (decrease) | 133,311 | $ 1,330,958 |
Class T | ||
Shares sold | 100,585 | $ 987,410 |
Reinvestment of distributions | 283 | 2,720 |
Shares redeemed | (3,744) | (33,713) |
Net increase (decrease) | 97,124 | $ 956,417 |
Class B | ||
Shares sold | 101,729 | $ 993,235 |
Reinvestment of distributions | 192 | 1,840 |
Shares redeemed | (10) | (88) |
Net increase (decrease) | 101,911 | $ 994,987 |
Class C | ||
Shares sold | 113,030 | $ 1,095,474 |
Reinvestment of distributions | 192 | 1,840 |
Net increase (decrease) | 113,222 | $ 1,097,314 |
Asset Manager 60% | ||
Shares sold | 1,027,913 | $ 9,634,668 |
Reinvestment of distributions | 1,882 | 18,064 |
Shares redeemed | (109,475) | (986,182) |
Net increase (decrease) | 920,320 | $ 8,666,550 |
Institutional Class | ||
Shares sold | 99,434 | $ 985,010 |
Reinvestment of distributions | 466 | 4,475 |
Shares redeemed | (167) | (1,500) |
Net increase (decrease) | 99,733 | $ 987,985 |
A For the period October 9, 2007 (commencement of operations) to March 31, 2008.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Asset Manager 60%
On September 20, 2007, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, considered a broad range of information.
In determining whether to approve the Advisory Contracts for the fund, the Board was aware that shareholders have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, may choose to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline.
Resources Dedicated to Investment Management and Support Services. The Board considered the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund. The Board also considered the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge.
Investment Performance. Fidelity Asset Manager 60% is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. Once the fund has been in operation for at least one calendar year, the Board will review the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against a broad-based securities market index and a peer group of mutual funds deemed appropriate by the Board.
Based on its review, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's proposed management fee and projected total operating expenses in reviewing the fund's Advisory Contracts. The Board noted that the fund's management fee and projected total expenses are comparable to those of similar funds that Fidelity offers to shareholders. The Board noted that the fund's proposed management fee rate is lower than the median fee rate of funds with similar Lipper investment objective categories and comparable management fee characteristics. The Board also considered that the projected total operating expenses are comparable to those of similar classes and funds that Fidelity offers to shareholders.
Based on its review, the Board concluded that the fund's management fee and the projected total expenses for each class of the fund were fair and reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved each fund's Advisory Contracts. In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders.
Semiannual Report
Economies of Scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets.
The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
ASANI-USAN-0508
1.849964.100
(Fidelity Investment logo)(registered trademark)
Fidelity
Asset Manager® 70%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee 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.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee 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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 895.50 | $ 3.74 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,021.05 | $ 3.99 |
* Expenses are equal to the Fund's annualized expense ratio of .79%; multiplied by the average account value over the period, multiplied by 183/366 (to reflect the onehalf year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio. In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to ..02%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 1.0 | 0.8 |
Procter & Gamble Co. | 1.0 | 0.9 |
Nintendo Co. Ltd. | 0.7 | 0.1 |
General Electric Co. | 0.7 | 0.8 |
JPMorgan Chase & Co. | 0.6 | 0.6 |
American International Group, Inc. | 0.6 | 0.6 |
The Coca-Cola Co. | 0.6 | 0.5 |
CVS Caremark Corp. | 0.7 | 0.4 |
PepsiCo, Inc. | 0.5 | 0.4 |
Bank of America Corp. | 0.5 | 0.6 |
6.9 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 29.1% | | Bond class 29.3% | ||||
| Short-term class* (0.3)% | | Short-term class* 0.0% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable. * Short-term class is not included in the pie chart. |
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 10.1 |
Fidelity Information Technology Central Fund | 9.0 |
Fidelity International Equity Central Fund | 8.8 |
Fidelity Energy Central Fund | 7.7 |
Fidelity Industrials Central Fund | 7.5 |
Fidelity Health Care Central Fund | 6.9 |
Fidelity Consumer Discretionary Central Fund | 6.0 |
Fidelity Consumer Staples Central Fund | 5.9 |
Fidelity Materials Central Fund | 2.5 |
Fidelity Utilities Central Fund | 2.3 |
Fidelity Telecom Services Central Fund | 1.8 |
Total Equity Central Funds | 68.5 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 22.8 |
High Yield Fixed-Income Funds | 4.1 |
Total Fixed-Income Central Funds | 26.9 |
Money Market Central Funds | 4.3 |
Other Short-Term Investments and Net Other Assets | 0.3 |
Total | 100.0 |
At period end, foreign investments, including the Fund's pro-rata share of the underlying Central Funds, was 22.9% of net assets. A holdings list for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com. |
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 68.5% | ||||
Shares | Value (000s) | |||
Fidelity Consumer Discretionary Central Fund (c) | 1,615,010 | $ 163,617 | ||
Fidelity Consumer Staples Central Fund (c) | 1,274,458 | 161,652 | ||
Fidelity Energy Central Fund (c) | 1,451,059 | 209,069 | ||
Fidelity Financials Central Fund (c) | 3,294,772 | 274,784 | ||
Fidelity Health Care Central Fund (c) | 1,841,301 | 188,549 | ||
Fidelity Industrials Central Fund (c) | 1,669,175 | 206,177 | ||
Fidelity Information Technology Central Fund (c) | 2,104,954 | 244,932 | ||
Fidelity International Equity Central Fund (c) | 2,832,800 | 241,581 | ||
Fidelity Materials Central Fund (c) | 481,375 | 67,932 | ||
Fidelity Telecom Services Central Fund (c) | 447,906 | 48,437 | ||
Fidelity Utilities Central Fund (c) | 556,155 | 64,019 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $1,825,748) | 1,870,749 | |||
Fixed-Income Central Funds - 26.9% | ||||
High Yield Fixed-Income Funds - 4.1% | ||||
Fidelity Floating Rate Central Fund (c) | 748,670 | 66,534 | ||
Fidelity High Income Central Fund 1 (c) | 486,534 | 45,145 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 111,679 | |||
Investment Grade Fixed-Income Funds - 22.8% | ||||
Fidelity Tactical Income Central Fund (c) | 6,566,154 | 622,602 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $762,186) | 734,281 | |||
Money Market Central Funds - 4.3% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 110,869,066 | 110,869 | ||
Fidelity Money Market Central Fund, 3.45% (a) | 8,056,119 | 8,056 | ||
TOTAL MONEY MARKET CENTRAL FUNDS (Cost $118,925) | 118,925 | |||
U.S. Treasury Obligations - 0.3% | ||||
Principal Amount (000s) | Value (000s) | |||
U.S. Treasury Bills, yield at date of purchase 1.4% to 1.59% 6/5/08 (b) | $ 8,000 | $ 7,982 | ||
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $2,714,836) | 2,731,937 | |||
NET OTHER ASSETS - 0.0% | (1,045) | |||
NET ASSETS - 100% | $ 2,730,892 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value (000s) | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
159 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 8,908 | $ 446 | ||
78 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 8,835 | (20) | ||
1,472 S&P 500 E-Mini Index Contracts | June 2008 | 97,446 | 2,299 | ||
75 TOPIX 150 Index Contracts (Japan) | June 2008 | 9,145 | 133 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 124,334 | $ 2,858 | |||
The face value of futures purchased as a percentage of net assets - 4.6% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $7,982,000. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site 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 (Amounts in thousands) |
Fidelity Cash Central Fund | $ 3,945 |
Fidelity Consumer Discretionary Central Fund | 1,357 |
Fidelity Consumer Staples Central Fund | 1,517 |
Fidelity Energy Central Fund | 798 |
Fidelity Financials Central Fund | 4,448 |
Fidelity Floating Rate Central Fund | 2,957 |
Fidelity Health Care Central Fund | 1,050 |
Fidelity High Income Central Fund 1 | 2,004 |
Fidelity Industrials Central Fund | 1,569 |
Fidelity Information Technology Central Fund | 968 |
Fidelity International Equity Central Fund | 1,416 |
Fidelity Materials Central Fund | 737 |
Fidelity Money Market Central Fund | 193 |
Fidelity Securities Lending Cash Central Fund | 9 |
Fidelity Tactical Income Central Fund | 17,621 |
Fidelity Telecom Services Central Fund | 573 |
Fidelity Utilities Central Fund | 734 |
Total | $ 41,896 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ 196,579 | $ - | $ - | $ 163,617 | 27.1% |
Fidelity Consumer Staples Central Fund | 160,773 | - | - | 161,652 | 27.1% |
Fidelity Energy Central Fund | 203,830 | - | - | 209,069 | 27.1% |
Fidelity Financials Central Fund | 365,226 | - | - | 274,784 | 27.1% |
Fidelity Floating Rate Central Fund | 87,902 | - | 14,388 | 66,534 | 2.8% |
Fidelity Health Care Central Fund | 220,312 | - | - | 188,549 | 27.1% |
Fidelity High Income Central Fund 1 | 54,188 | - | 6,201 | 45,145 | 17.4% |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Industrials Central Fund | $ 225,622 | $ - | $ - | $ 206,177 | 27.1% |
Fidelity Information Technology Central Fund | 315,933 | - | - | 244,932 | 27.1% |
Fidelity International Equity Central Fund | - | 282,232 | - | 241,581 | 31.7% |
Fidelity Materials Central Fund | 70,728 | - | - | 67,932 | 27.1% |
Fidelity Tactical Income Central Fund | 682,133 | 17,621 | 62,906 | 622,602 | 12.7% |
Fidelity Telecom Services Central Fund | 68,234 | - | - | 48,437 | 27.1% |
Fidelity Utilities Central Fund | 68,507 | - | - | 64,019 | 27.1% |
Total | $ 2,719,967 | $ 299,853 | $ 83,495 | $ 2,605,030 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 14.0% |
AAA,AA,A | 6.5% |
BBB | 4.4% |
BB | 2.6% |
B | 1.2% |
CCC,CC,C | 0.1% |
Not Rated | 0.2% |
Equities | 71.1% |
Short-Term Investments and Net Other Assets | (0.1)% |
100.0% |
We have used ratings from Moody's ® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 77.1% |
United Kingdom | 3.4% |
Japan | 2.2% |
Bermuda | 2.1% |
Switzerland | 1.7% |
Germany | 1.7% |
France | 1.5% |
Cayman Islands | 1.2% |
Canada | 1.1% |
Others (individually less than 1%) | 8.0% |
100.0% |
Income Tax Information |
At September 30, 2007, the fund had a capital loss carryforward of approximately $108,204,000 all of which will expire on September 30, 2011. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | March 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $7,977) | $ 7,982 | |
Fidelity Central Funds (cost $2,706,859) | 2,723,955 | |
Total Investments (cost $2,714,836) | $ 2,731,937 | |
Receivable for fund shares sold | 2,293 | |
Dividends receivable | 16 | |
Distributions receivable from Fidelity Central Funds | 3,680 | |
Receivable for daily variation on futures contracts | 67 | |
Prepaid expenses | 8 | |
Other receivables | 111 | |
Total assets | 2,738,112 | |
Liabilities | ||
Payable for investments purchased | $ 2,665 | |
Payable for fund shares redeemed | 2,520 | |
Accrued management fee | 1,265 | |
Transfer agent fee payable | 443 | |
Other affiliated payables | 90 | |
Other payables and accrued expenses | 237 | |
Total liabilities | 7,220 | |
Net Assets | $ 2,730,892 | |
Net Assets consist of: | ||
Paid in capital | $ 2,919,829 | |
Undistributed net investment income | 13,394 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (222,270) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 19,939 | |
Net Assets, for 175,834 shares outstanding | $ 2,730,892 | |
Net Asset Value, offering price and redemption price per share ($2,730,892 ÷ 175,834 shares) | $ 15.53 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends | $ 43 | |
Interest | 274 | |
Income from Fidelity Central Funds | 41,896 | |
Total income | 42,213 | |
Expenses | ||
Management fee | $ 8,278 | |
Transfer agent fees | 2,767 | |
Accounting fees and expenses | 560 | |
Custodian fees and expenses | 23 | |
Independent trustees' compensation | 6 | |
Registration fees | 20 | |
Audit | 39 | |
Legal | 21 | |
Miscellaneous | 12 | |
Total expenses before reductions | 11,726 | |
Expense reductions | (167) | 11,559 |
Net investment income (loss) | 30,654 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $98) | 15 | |
Fidelity Central Funds | (619) | |
Foreign currency transactions | (461) | |
Futures contracts | (10,143) | |
Total net realized gain (loss) | (11,208) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $49) | (334,471) | |
Assets and liabilities in foreign currencies | (20) | |
Futures contracts | (7,901) | |
Total change in net unrealized appreciation (depreciation) | (342,392) | |
Net gain (loss) | (353,600) | |
Net increase (decrease) in net assets resulting from operations | $ (322,946) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended March 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 30,654 | $ 72,467 |
Net realized gain (loss) | (11,208) | 97,198 |
Change in net unrealized appreciation (depreciation) | (342,392) | 279,532 |
Net increase (decrease) in net assets resulting | (322,946) | 449,197 |
Distributions to shareholders from net investment income | (72,024) | (74,719) |
Distributions to shareholders from net realized gain | (3,513) | - |
Total distributions | (75,537) | (74,719) |
Share transactions | 116,224 | 246,833 |
Reinvestment of distributions | 74,273 | 73,511 |
Cost of shares redeemed | (323,215) | (569,823) |
Net increase (decrease) in net assets resulting from share transactions | (132,718) | (249,479) |
Total increase (decrease) in net assets | (531,201) | 124,999 |
Net Assets | ||
Beginning of period | 3,262,093 | 3,137,094 |
End of period (including undistributed net investment income of $13,394 and undistributed net investment income of $56,361, respectively) | $ 2,730,892 | $ 3,262,093 |
Other Information Shares | ||
Sold | 6,957 | 14,701 |
Issued in reinvestment of distributions | 4,364 | 4,502 |
Redeemed | (18,965) | (33,998) |
Net increase (decrease) | (7,644) | (14,795) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 17.78 | $ 15.82 | $ 14.94 | $ 14.10 | $ 13.47 | $ 11.30 |
Income from Investment | ||||||
Net investment income (loss) D | .17 | .38 | .34 | .31 F | .25 | .32 |
Net realized and unrealized gain (loss) | (1.99) | 1.97 | .84 | .85 | .69 | 2.21 |
Total from investment operations | (1.82) | 2.35 | 1.18 | 1.16 | .94 | 2.53 |
Distributions from net investment income | (.41) | (.39) | (.29) | (.32) | (.31) | (.36) |
Distributions from net realized gain | (.02) | - | (.01) | - | - | - |
Total distributions | (.43) | (.39) | (.30) | (.32) | (.31) | (.36) |
Net asset value, end of period | $ 15.53 | $ 17.78 | $ 15.82 | $ 14.94 | $ 14.10 | $ 13.47 |
Total Return B, C | (10.45) % | 15.07% | 7.98% | 8.28% | 6.99% | 22.74% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .79% A | .80% | .81% | .82% | .83% | .84% |
Expenses net of fee waivers, if any | .79% A | .80% | .81% | .82% | .83% | .84% |
Expenses net of all reductions | .78% A | .78% | .79% | .80% | .82% | .83% |
Net investment income (loss) | 2.06% A | 2.26% | 2.20% | 2.11% F | 1.77% | 2.53% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 2,731 | $ 3,262 | $ 3,137 | $ 3,284 | $ 3,588 | $ 3,521 |
Portfolio turnover rate E | 17% A | 14% | 82% H | 37% H | 67% | 72% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $.06 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.73%.
G Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Asset Manager 70% (the Fund) is a fund of Fidelity Charles 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% to ..02% |
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central | Investment | Investment | Investment | Expense |
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Investments in Fidelity Central Funds - continued
statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity,
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Expenses - continued
made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional 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 by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Fidelity Central Funds), deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 105,881 | |
Unrealized depreciation | (185,638) | |
Net unrealized appreciation (depreciation) | $ (79,757) | |
Cost for federal income tax purposes | $ 2,811,694 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Operating Policies - continued
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $307,463 and $233,875, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, 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. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the Fund's transfer agent. For the period the transfer agent fees were equivalent to an annualized rate of .19% of average net assets.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $4 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
8. Security Lending - continued
lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $9.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $116 for the period. In addition, through arrangements with the Fund's transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's transfer agent expenses by $51.
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $283, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate
Semiannual Report
10. Other - continued
of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Proposed Reorganization
On May 15, 2008, the Board of Trustees of the Fund approved an Agreement and Plan of Reorganization between the Fund and Fidelity Advisor Asset Manager 70% Fund. The agreement provides for the transfer of all the assets and the assumption of all the liabilities of Fidelity Advisor Asset Manager 70% Fund in exchange solely for the number of equivalent shares of the Fund having the same aggregate net asset value as the outstanding shares of the corresponding classes of Fidelity Advisor Asset Manager 70%, on the day the reorganization is effective.
The reorganization, which does not require shareholder approval, is expected to become effective on or about September 26, 2008. The reorganization is expected to qualify as a tax-free transaction with no gain or loss recognized by the Funds or their shareholders.
New share classes will be created for the purpose of the reorganization with Fidelity Advisor Asset Manager 70% Fund and the Fund's existing class will be renamed the "Fidelity Asset Manager 70%" share class. The new share classes will not commence operations until approximately the date of the reorganization.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments
Money Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
(for the deaf and hearing impaired)
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
AMG-USAN-0508
1.792154.104
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Asset ManagerSM 70% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended September 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 897.10 | $ 5.60 |
Hypothetical A | $ 1,000.00 | $ 1,019.10 | $ 5.96 |
Class T | |||
Actual | $ 1,000.00 | $ 896.80 | $ 6.83 |
Hypothetical A | $ 1,000.00 | $ 1,017.80 | $ 7.26 |
Class B | |||
Actual | $ 1,000.00 | $ 894.30 | $ 9.33 |
Hypothetical A | $ 1,000.00 | $ 1,015.15 | $ 9.92 |
Class C | |||
Actual | $ 1,000.00 | $ 894.00 | $ 9.04 |
Hypothetical A | $ 1,000.00 | $ 1,015.45 | $ 9.62 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 898.70 | $ 4.46 |
Hypothetical A | $ 1,000.00 | $ 1,020.30 | $ 4.75 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.18% |
Class T | 1.44% |
Class B | 1.97% |
Class C | 1.91% |
Institutional Class | .94% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.9 | 0.8 |
Procter & Gamble Co. | 0.9 | 0.8 |
Nintendo Co. Ltd. | 0.7 | 0.1 |
General Electric Co. | 0.7 | 0.8 |
JPMorgan Chase & Co. | 0.6 | 0.6 |
American International Group, Inc. | 0.6 | 0.6 |
The Coca-Cola Co. | 0.6 | 0.5 |
CVS Caremark Corp. | 0.6 | 0.3 |
PepsiCo, Inc. | 0.5 | 0.4 |
Bank of America Corp. | 0.5 | 0.6 |
6.6 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 28.8% | | Bond class 27.8% | ||||
| Short-term class 0.4% | | Short-term class 2.2% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 9.6 |
Fidelity International Equity Central Fund | 9.1 |
Fidelity Information Technology Central Fund | 8.6 |
Fidelity Energy Central Fund | 7.3 |
Fidelity Industrials Central Fund | 7.2 |
Fidelity Health Care Central Fund | 6.6 |
Fidelity Consumer Discretionary Central Fund | 5.7 |
Fidelity Consumer Staples Central Fund | 5.6 |
Fidelity Materials Central Fund | 2.4 |
Fidelity Utilities Central Fund | 2.2 |
Fidelity Telecom Services Central Fund | 1.7 |
Total Equity Central Funds | 66.0 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 22.8 |
High Yield Fixed-Income Funds | 4.1 |
Total Fixed-Income Central Funds | 26.9 |
Money Market Central Funds | 7.6 |
Other Short-Term Investments and Net Other Assets | (0.5) |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 22.8% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 66.0% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 149,441 | $ 15,139,887 | ||
Fidelity Consumer Staples Central Fund (c) | 117,925 | 14,957,587 | ||
Fidelity Energy Central Fund (c) | 134,327 | 19,353,790 | ||
Fidelity Financials Central Fund (c) | 304,536 | 25,398,286 | ||
Fidelity Health Care Central Fund (c) | 170,506 | 17,459,787 | ||
Fidelity Industrials Central Fund (c) | 154,457 | 19,078,493 | ||
Fidelity Information Technology Central Fund (c) | 194,793 | 22,666,166 | ||
Fidelity International Equity Central Fund (c) | 281,300 | 23,989,264 | ||
Fidelity Materials Central Fund (c) | 44,554 | 6,287,523 | ||
Fidelity Telecom Services Central Fund (c) | 41,445 | 4,481,835 | ||
Fidelity Utilities Central Fund (c) | 51,414 | 5,918,278 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $170,457,600) | 174,730,896 | |||
Fixed-Income Central Funds - 26.9% | ||||
High Yield Fixed-Income Funds - 4.1% | ||||
Fidelity Floating Rate Central Fund (c) | 65,839 | 5,851,112 | ||
Fidelity High Income Central Fund 1 (c) | 53,887 | 5,000,129 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 10,851,241 | |||
Investment Grade Fixed-Income Funds - 22.8% | ||||
Fidelity Tactical Income Central Fund (c) | 635,931 | 60,298,930 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $73,640,538) | 71,150,171 | |||
Money Market Central Funds - 7.6% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 20,135,950 | 20,135,950 | ||
U.S. Treasury Obligations - 0.6% | ||||
Principal Amount | Value | |||
U.S. Treasury Bills, yield at date of purchase 1.59% 6/5/08 (b) | $ 1,500,000 | $ 1,496,547 | ||
TOTAL INVESTMENT PORTFOLIO - 101.1% (Cost $265,729,740) | 267,513,564 | |||
NET OTHER ASSETS - (1.1)% | (2,943,036) | |||
NET ASSETS - 100% | $ 264,570,528 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
15 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 840,368 | $ 42,104 | ||
7 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 792,896 | (1,827) | ||
250 S&P 500 E-Mini Index Contracts | June 2008 | 16,550,000 | 336,659 | ||
7 TOPIX 150 Index Contracts (Japan) | June 2008 | 853,539 | 12,399 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 19,036,803 | $ 389,335 | |||
The face value of futures purchased as a percentage of net assets - 7.2% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $1,496,547. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site 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 | $ 707,694 |
Fidelity Consumer Discretionary Central Fund | 121,476 |
Fidelity Consumer Staples Central Fund | 136,320 |
Fidelity Energy Central Fund | 71,266 |
Fidelity Financials Central Fund | 396,383 |
Fidelity Floating Rate Central Fund | 236,983 |
Fidelity Health Care Central Fund | 94,187 |
Fidelity High Income Central Fund 1 | 197,619 |
Fidelity Industrials Central Fund | 140,667 |
Fidelity Information Technology Central Fund | 87,372 |
Fidelity International Equity Central Fund | 140,650 |
Fidelity Materials Central Fund | 65,769 |
Fidelity Securities Lending Cash Central Fund | 589 |
Fidelity Tactical Income Central Fund | 1,579,661 |
Fidelity Telecom Services Central Fund | 50,915 |
Fidelity Utilities Central Fund | 65,414 |
Total | $ 4,092,965 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ 17,245,921 | $ 816,093 | $ - | $ 15,139,887 | 2.5% |
Fidelity Consumer Staples Central Fund | 14,109,731 | 761,300 | - | 14,957,587 | 2.5% |
Fidelity Energy Central Fund | 17,891,901 | 981,100 | - | 19,353,790 | 2.5% |
Fidelity Financials Central Fund | 31,973,442 | 1,456,910 | - | 25,398,286 | 2.5% |
Fidelity Floating Rate Central Fund | 6,353,793 | 71,966 | - | 5,851,112 | 0.2% |
Fidelity Health Care Central Fund | 19,335,767 | 1,018,734 | - | 17,459,787 | 2.5% |
Fidelity High Income Central Fund 1 | 4,712,980 | 572,219 | - | 5,000,129 | 1.9% |
Fidelity Industrials Central Fund | 19,791,552 | 989,495 | - | 19,078,493 | 2.5% |
Fidelity Information Technology Central Fund | 27,717,788 | 1,249,190 | - | 22,666,166 | 2.5% |
Fidelity International Equity Central Fund | - | 27,886,922 | - | 23,989,264 | 3.1% |
Fidelity Materials Central Fund | 6,205,653 | 322,921 | - | 6,287,523 | 2.5% |
Fidelity Tactical Income Central Fund | 60,006,631 | 1,579,661 | - | 60,298,930 | 1.2% |
Fidelity Telecom Services Central Fund | 5,988,143 | 253,206 | - | 4,481,835 | 2.5% |
Fidelity Utilities Central Fund | 6,014,031 | 315,393 | - | 5,918,278 | 2.5% |
Total | $ 237,347,333 | $ 38,275,110 | $ - | $ 245,881,067 |
Other Information |
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 14.0% |
AAA,AA,A | 6.5% |
BBB | 4.4% |
BB | 2.6% |
B | 1.3% |
CCC,CC,C | 0.2% |
Not Rated | 0.1% |
Equities | 71.5% |
Short-Term Investments and Net Other Assets | (0.6)% |
100.0% |
We have used ratings from Moody's ® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 77.2% |
United Kingdom | 3.3% |
Japan | 2.2% |
Bermuda | 2.1% |
Switzerland | 1.7% |
Germany | 1.7% |
France | 1.6% |
Cayman Islands | 1.3% |
Canada | 1.1% |
Others (individually less than 1%) | 7.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $1,495,652) | $ 1,496,547 | |
Fidelity Central Funds (cost $264,234,088) | 266,017,017 | |
Total Investments (cost $265,729,740) | $ 267,513,564 | |
Foreign currency held at value (cost $27) | 27 | |
Receivable for fund shares sold | 605,198 | |
Dividends receivable | 93 | |
Distributions receivable from Fidelity Central Funds | 379,165 | |
Receivable for daily variation on futures contracts | 35,100 | |
Prepaid expenses | 684 | |
Other receivables | 1,127 | |
Total assets | 268,534,958 | |
Liabilities | ||
Payable for investments purchased | $ 252,318 | |
Payable for fund shares redeemed | 3,361,016 | |
Accrued management fee | 123,815 | |
Distribution fees payable | 114,078 | |
Other affiliated payables | 70,582 | |
Other payables and accrued expenses | 42,621 | |
Total liabilities | 3,964,430 | |
Net Assets | $ 264,570,528 | |
Net Assets consist of: | ||
Paid in capital | $ 277,272,249 | |
Undistributed net investment income | 821,525 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (15,694,435) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,171,189 | |
Net Assets | $ 264,570,528 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.01 | |
Maximum offering price per share (100/94.25 of $11.01) | $ 11.68 | |
Class T: | $ 10.96 | |
Maximum offering price per share (100/96.50 of $10.96) | $ 11.36 | |
Class B: | $ 10.89 | |
Class C: | $ 10.87 | |
Institutional Class: | $ 11.05 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended March 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 4,554 | |
Interest | 29,533 | |
Income from Fidelity Central Funds | 4,092,965 | |
Total income | 4,127,052 | |
Expenses | ||
Management fee | $ 788,271 | |
Transfer agent fees | 366,863 | |
Distribution fees | 742,297 | |
Accounting and security lending fees | 69,783 | |
Custodian fees and expenses | 16,588 | |
Independent trustees' compensation | 582 | |
Registration fees | 54,188 | |
Audit | 25,049 | |
Legal | 963 | |
Miscellaneous | 916 | |
Total expenses before reductions | 2,065,500 | |
Expense reductions | (13,627) | 2,051,873 |
Net investment income (loss) | 2,075,179 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $8,648) | 233,314 | |
Foreign currency transactions | (38,659) | |
Futures contracts | (2,239,677) | |
Total net realized gain (loss) | (2,045,022) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $4,378) | (30,439,728) | |
Assets and liabilities in foreign currencies | (1,910) | |
Futures contracts | (746,420) | |
Total change in net unrealized appreciation (depreciation) | (31,188,058) | |
Net gain (loss) | (33,233,080) | |
Net increase (decrease) in net assets resulting from operations | $ (31,157,901) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended March 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 2,075,179 | $ 4,445,631 |
Net realized gain (loss) | (2,045,022) | 4,267,233 |
Change in net unrealized appreciation (depreciation) | (31,188,058) | 25,556,999 |
Net increase (decrease) in net assets resulting | (31,157,901) | 34,269,863 |
Distributions to shareholders from net investment income | (2,838,777) | (4,327,004) |
Distributions to shareholders from net realized gain | (15,872,191) | (8,126,935) |
Total distributions | (18,710,968) | (12,453,939) |
Share transactions - net increase (decrease) | 21,019,103 | 39,052,304 |
Total increase (decrease) in net assets | (28,849,766) | 60,868,228 |
Net Assets | ||
Beginning of period | 293,420,294 | 232,552,066 |
End of period (including undistributed net investment income of $821,525 and undistributed net investment income of $1,585,123, respectively) | $ 264,570,528 | $ 293,420,294 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 13.12 | $ 12.10 | $ 12.48 | $ 11.10 | $ 9.93 | $ 8.77 | $ 9.83 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .10 | .25 | .17 | .10 | .08 | .12 | .15 |
Net realized and unrealized gain (loss) | (1.38) | 1.43 | .54 | 1.36 | 1.17 | 1.16 | (1.05) |
Total from investment operations | (1.28) | 1.68 | .71 | 1.46 | 1.25 | 1.28 | (.90) |
Distributions from net investment income | (.14) | (.25) | (.13) | (.08) | (.08) | (.12) | (.16) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.83) | (.66) | (1.09) | (.08) | (.08) | (.12) | (.16) |
Net asset value, end of period | $ 11.01 | $ 13.12 | $ 12.10 | $ 12.48 | $ 11.10 | $ 9.93 | $ 8.77 |
Total Return B, C, D | (10.29)% | 14.30% | 6.04% | 13.22% | 12.66% | 14.79% | (9.28)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.18% A | 1.18% | 1.24% A | 1.26% | 1.28% | 1.27% | 1.29% |
Expenses net of fee waivers, if any | 1.18% A | 1.18% | 1.24% A | 1.26% | 1.28% | 1.27% | 1.29% |
Expenses net of all reductions | 1.16% A | 1.17% | 1.22% A | 1.23% | 1.25% | 1.23% | 1.25% |
Net investment income (loss) | 1.75% A | 1.98% | 1.72% A | .85% | .75% | 1.33% | 1.65% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 112,953 | $ 122,510 | $ 76,226 | $ 52,137 | $ 36,512 | $ 36,234 | $ 29,894 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 13.05 | $ 12.05 | $ 12.42 | $ 11.05 | $ 9.90 | $ 8.75 | $ 9.79 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .09 | .21 | .14 | .07 | .05 | .09 | .13 |
Net realized and unrealized gain (loss) | (1.36) | 1.41 | .55 | 1.35 | 1.17 | 1.15 | (1.05) |
Total from investment operations | (1.27) | 1.62 | .69 | 1.42 | 1.22 | 1.24 | (.92) |
Distributions from net investment income | (.13) | (.21) | (.10) | (.05) | (.07) | (.09) | (.12) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.82) | (.62) | (1.06) | (.05) | (.07) | (.09) | (.12) |
Net asset value, end of period | $ 10.96 | $ 13.05 | $ 12.05 | $ 12.42 | $ 11.05 | $ 9.90 | $ 8.75 |
Total Return B, C, D | (10.32)% | 13.87% | 5.90% | 12.83% | 12.39% | 14.33% | (9.50)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.44% A | 1.45% | 1.50% A | 1.52% | 1.57% | 1.59% | 1.56% |
Expenses net of fee waivers, if any | 1.44% A | 1.45% | 1.50% A | 1.52% | 1.57% | 1.59% | 1.56% |
Expenses net of all reductions | 1.43% A | 1.44% | 1.48% A | 1.50% | 1.55% | 1.56% | 1.53% |
Net investment income (loss) | 1.48% A | 1.70% | 1.45% A | .58% | .46% | 1.00% | 1.38% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 65,220 | $ 71,580 | $ 72,582 | $ 62,862 | $ 57,816 | $ 54,298 | $ 45,804 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 12.97 | $ 11.99 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.73 | $ 9.78 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .06 | .14 | .09 | .01 | (.01) | .04 | .08 |
Net realized and unrealized gain (loss) | (1.36) | 1.41 | .55 | 1.34 | 1.17 | 1.15 | (1.05) |
Total from investment operations | (1.30) | 1.55 | .64 | 1.35 | 1.16 | 1.19 | (.97) |
Distributions from net investment income | (.09) | (.16) | (.05) | - | (.02) | (.05) | (.08) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.78) | (.57) | (1.01) | - | (.02) | (.05) | (.08) |
Net asset value, end of period | $ 10.89 | $ 12.97 | $ 11.99 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.73 |
Total Return B, C, D | (10.57)% | 13.26% | 5.45% | 12.26% | 11.77% | 13.72% | (10.00)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.97% A | 1.99% | 2.05% A | 2.08% | 2.14% | 2.12% | 2.10% |
Expenses net of fee waivers, if any | 1.97% A | 1.99% | 2.00% A | 2.04% | 2.14% | 2.12% | 2.10% |
Expenses net of all reductions | 1.97% A | 1.99% | 1.99% A | 2.01% | 2.11% | 2.08% | 2.06% |
Net investment income (loss) | .94% A | 1.16% | .95% A | .07% | (.11)% | .48% | .84% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 30,353 | $ 37,752 | $ 38,555 | $ 40,236 | $ 32,642 | $ 25,463 | $ 19,261 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 12.96 | $ 11.97 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.72 | $ 9.77 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .06 | .15 | .09 | .01 | (.01) | .05 | .08 |
Net realized and unrealized gain (loss) | (1.36) | 1.41 | .54 | 1.35 | 1.17 | 1.15 | (1.05) |
Total from investment operations | (1.30) | 1.56 | .63 | 1.36 | 1.16 | 1.20 | (.97) |
Distributions from net investment income | (.10) | (.16) | (.06) | (.01) | (.02) | (.05) | (.08) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.79) | (.57) | (1.02) | (.01) | (.02) | (.05) | (.08) |
Net asset value, end of period | $ 10.87 | $ 12.96 | $ 11.97 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.72 |
Total Return B, C, D | (10.60)% | 13.43% | 5.37% | 12.31% | 11.77% | 13.85% | (10.01)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.91% A | 1.92% | 1.98% A | 2.02% | 2.08% | 2.08% | 2.07% |
Expenses net of fee waivers, if any | 1.91% A | 1.92% | 1.98% A | 2.02% | 2.08% | 2.08% | 2.07% |
Expenses net of all reductions | 1.90% A | 1.92% | 1.97% A | 1.99% | 2.05% | 2.05% | 2.03% |
Net investment income (loss) | 1.01% A | 1.23% | .97% A | .09% | (.05)% | .52% | .88% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 44,960 | $ 51,554 | $ 41,117 | $ 31,397 | $ 20,023 | $ 13,150 | $ 9,574 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 F | 2005 H | 2004 H | 2003 H | 2002 H | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 13.16 | $ 12.14 | $ 12.51 | $ 11.14 | $ 9.95 | $ 8.78 | $ 9.85 |
Income from Investment Operations | |||||||
Net investment income (loss) D | .12 | .28 | .19 | .14 | .11 | .15 | .16 |
Net realized and unrealized gain (loss) | (1.38) | 1.42 | .56 | 1.36 | 1.19 | 1.15 | (1.04) |
Total from investment operations | (1.26) | 1.70 | .75 | 1.50 | 1.30 | 1.30 | (.88) |
Distributions from net investment income | (.16) | (.27) | (.16) | (.13) | (.11) | (.13) | (.19) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.85) | (.68) | (1.12) | (.13) | (.11) | (.13) | (.19) |
Net asset value, end of period | $ 11.05 | $ 13.16 | $ 12.14 | $ 12.51 | $ 11.14 | $ 9.95 | $ 8.78 |
Total Return B, C | (10.13)% | 14.46% | 6.37% | 13.56% | 13.17% | 15.03% | (9.07)% |
Ratios to Average Net Assets G | |||||||
Expenses before reductions | .94% A | .96% | .97% A | .93% | .92% | 1.13% | 1.11% |
Expenses net of fee waivers, if any | .94% A | .96% | .97% A | .93% | .92% | 1.13% | 1.11% |
Expenses net of all reductions | .93% A | .95% | .96% A | .91% | .89% | 1.09% | 1.07% |
Net investment income (loss) | 1.98% A | 2.19% | 1.98% A | 1.17% | 1.11% | 1.47% | 1.84% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 11,084 | $ 10,024 | $ 4,072 | $ 1,768 | $ 787 | $ 707 | $ 5,359 |
Portfolio turnover rate E | 11% A | 12% | 105% A, I | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Amount does not include the portfolio activity of any underlying Fidelity Central Funds. FFor the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. 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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. H For the year ended November 30. I Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Asset Manager 70% (the Fund) is a fund of Fidelity Charles 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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Repurchase Agreements Restricted Securities Loans & Direct Debt Instruments | Less than .01% to .02% | ||
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | ||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% | ||
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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.
Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds) and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 8,669,874 |
Unrealized depreciation | (17,557,408) |
Net unrealized appreciation (depreciation) | $ (8,887,534) |
Cost for federal income tax purposes | $ 276,401,098 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $38,951,420 and $13,241,182, respectively.
Semiannual Report
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 149,602 | $ 26,950 |
Class T | .25% | .25% | 172,066 | 306 |
Class B | .75% | .25% | 172,565 | 129,423 |
Class C | .75% | .25% | 248,064 | 43,741 |
$ 742,297 | $ 200,420 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 34,683 |
Class T | 13,292 |
Class B* | 31,613 |
Class C* | 4,710 |
$ 84,298 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 151,324 | .25 |
Class T | 91,120 | .26 |
Class B | 52,240 | .30 |
Class C | 57,909 | .23 |
Institutional Class | 14,270 | .27 |
$ 366,863 |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $13 for the period.
Semiannual Report
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $362 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $589.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $9,936 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | ||
Class A | $ 3,231 | |
Institutional Class | 460 | |
$ 3,691 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $15,668, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended March 31, | Year ended | ||||
From net investment income | |||||
Class A | $ 1,359,577 | $ 1,873,468 | |||
Class T | 693,146 | 1,281,836 | |||
Class B | 256,229 | 489,166 | |||
Class C | 394,498 | 591,916 | |||
Institutional Class | 135,327 | 90,618 | |||
Total | $ 2,838,777 | $ 4,327,004 | |||
Semiannual Report
11. Distributions to Shareholders - continued
Six months ended March 31, | Year ended | ||||
From net realized gain | |||||
Class A | $ 6,585,970 | $ 2,721,973 | |||
Class T | 3,833,169 | 2,507,451 | |||
Class B | 1,969,160 | 1,287,410 | |||
Class C | 2,852,871 | 1,480,024 | |||
Institutional Class | 631,021 | 130,077 | |||
Total | $ 15,872,191 | $ 8,126,935 | |||
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | ||||
Six months ended | Year ended | |||
Class A | ||||
Shares sold | 1,752,592 | 4,916,013 | ||
Reinvestment of distributions | 623,131 | 350,523 | ||
Shares redeemed | (1,459,177) | (2,225,378) | ||
Net increase (decrease) | 916,546 | 3,041,158 | ||
Class T | ||||
Shares sold | 631,546 | 1,257,577 | ||
Reinvestment of distributions | 365,770 | 304,675 | ||
Shares redeemed | (529,132) | (2,103,513) | ||
Net increase (decrease) | 468,184 | (541,261) | ||
Class B | ||||
Shares sold | 250,800 | 591,393 | ||
Reinvestment of distributions | 168,537 | 132,544 | ||
Shares redeemed | (541,739) | (1,030,307) | ||
Net increase (decrease) | (122,402) | (306,370) | ||
Class C | ||||
Shares sold | 485,746 | 1,051,849 | ||
Reinvestment of distributions | 242,645 | 154,127 | ||
Shares redeemed | (571,353) | (662,041) | ||
Net increase (decrease) | 157,038 | 543,935 | ||
Institutional Class | ||||
Shares sold | 329,202 | 549,314 | ||
Reinvestment of distributions | 60,344 | 15,792 | ||
Shares redeemed | (148,007) | (138,857) | ||
Net increase (decrease) | 241,539 | 426,249 | ||
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Dollars | |||
Six months ended March 31, | Year ended | ||
Class A | |||
Shares sold | $ 20,976,634 | $ 61,499,552 | |
Reinvestment of distributions | 7,563,940 | 4,311,917 | |
Shares redeemed | (17,174,030) | (27,985,899) | |
Net increase (decrease) | $ 11,366,544 | $ 37,825,570 | |
Class T | |||
Shares sold | $ 7,576,791 | $ 15,671,010 | |
Reinvestment of distributions | 4,417,441 | 3,720,662 | |
Shares redeemed | (6,297,449) | (26,430,266) | |
Net increase (decrease) | $ 5,696,783 | $ (7,038,594) | |
Class B | |||
Shares sold | $ 2,988,434 | $ 7,305,242 | |
Reinvestment of distributions | 2,021,728 | 1,607,140 | |
Shares redeemed | (6,318,880) | (12,777,362) | |
Net increase (decrease) | $ (1,308,718) | $ (3,864,980) | |
Class C | |||
Shares sold | $ 5,882,684 | $ 13,086,406 | |
Reinvestment of distributions | 2,906,442 | 1,870,578 | |
Shares redeemed | (6,541,042) | (8,207,622) | |
Net increase (decrease) | $ 2,248,084 | $ 6,749,362 | |
Institutional Class | |||
Shares sold | $ 4,016,768 | $ 6,935,534 | |
Reinvestment of distributions | 733,886 | 194,543 | |
Shares redeemed | (1,734,244) | (1,749,131) | |
Net increase (decrease) | $ 3,016,410 | $ 5,380,946 | |
13. Proposed Reorganization.
On May 15, 2008, the Board of Trustees of the Fund approved an Agreement and Plan of Reorganization between the Fund and Fidelity Asset Manager 70% Fund. The agreement provides for the transfer of all the assets and the assumption of all the liabilities of the Fund in exchange solely for the number of equivalent shares of Class A, Class T, Class B, Class C and Institutional Class (Advisor Classes) of Fidelity Asset Manager 70% Fund having the same aggregate net asset value as the outstanding shares of Class A, Class T, Class B, Class C and Institutional Class of the Fund on the day the reorganization is effective. The Advisor Classes of Fidelity Asset Manager 70% are being created for purposes of the reorganization and will not commence operations until the day of the reorganization.
Semiannual Report
13. Proposed Reorganization - continued
The reorganization, which does not require shareholder approval, is expected to become effective on or about September 26, 2008. The reorganization is expected to qualify as a tax-free transaction with no gain or loss recognized by the Funds or their shareholders.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments
Money Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
State Street Bank and Trust Company
Quincy, MA
AAL-USAN-0508
1.786775.105
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Asset ManagerSM 70% -
Institutional Class
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended September 30, visit http://www.fidelity.com (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 897.10 | $ 5.60 |
Hypothetical A | $ 1,000.00 | $ 1,019.10 | $ 5.96 |
Class T | |||
Actual | $ 1,000.00 | $ 896.80 | $ 6.83 |
Hypothetical A | $ 1,000.00 | $ 1,017.80 | $ 7.26 |
Class B | |||
Actual | $ 1,000.00 | $ 894.30 | $ 9.33 |
Hypothetical A | $ 1,000.00 | $ 1,015.15 | $ 9.92 |
Class C | |||
Actual | $ 1,000.00 | $ 894.00 | $ 9.04 |
Hypothetical A | $ 1,000.00 | $ 1,015.45 | $ 9.62 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 898.70 | $ 4.46 |
Hypothetical A | $ 1,000.00 | $ 1,020.30 | $ 4.75 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.18% |
Class T | 1.44% |
Class B | 1.97% |
Class C | 1.91% |
Institutional Class | .94% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 0.9 | 0.8 |
Procter & Gamble Co. | 0.9 | 0.8 |
Nintendo Co. Ltd. | 0.7 | 0.1 |
General Electric Co. | 0.7 | 0.8 |
JPMorgan Chase & Co. | 0.6 | 0.6 |
American International Group, Inc. | 0.6 | 0.6 |
The Coca-Cola Co. | 0.6 | 0.5 |
CVS Caremark Corp. | 0.6 | 0.3 |
PepsiCo, Inc. | 0.5 | 0.4 |
Bank of America Corp. | 0.5 | 0.6 |
6.6 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 28.8% | | Bond class 27.8% | ||||
| Short-term class 0.4% | | Short-term class 2.2% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity Financials Central Fund | 9.6 |
Fidelity International Equity Central Fund | 9.1 |
Fidelity Information Technology Central Fund | 8.6 |
Fidelity Energy Central Fund | 7.3 |
Fidelity Industrials Central Fund | 7.2 |
Fidelity Health Care Central Fund | 6.6 |
Fidelity Consumer Discretionary Central Fund | 5.7 |
Fidelity Consumer Staples Central Fund | 5.6 |
Fidelity Materials Central Fund | 2.4 |
Fidelity Utilities Central Fund | 2.2 |
Fidelity Telecom Services Central Fund | 1.7 |
Total Equity Central Funds | 66.0 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 22.8 |
High Yield Fixed-Income Funds | 4.1 |
Total Fixed-Income Central Funds | 26.9 |
Money Market Central Funds | 7.6 |
Other Short-Term Investments and Net Other Assets | (0.5) |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 22.8% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 66.0% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 149,441 | $ 15,139,887 | ||
Fidelity Consumer Staples Central Fund (c) | 117,925 | 14,957,587 | ||
Fidelity Energy Central Fund (c) | 134,327 | 19,353,790 | ||
Fidelity Financials Central Fund (c) | 304,536 | 25,398,286 | ||
Fidelity Health Care Central Fund (c) | 170,506 | 17,459,787 | ||
Fidelity Industrials Central Fund (c) | 154,457 | 19,078,493 | ||
Fidelity Information Technology Central Fund (c) | 194,793 | 22,666,166 | ||
Fidelity International Equity Central Fund (c) | 281,300 | 23,989,264 | ||
Fidelity Materials Central Fund (c) | 44,554 | 6,287,523 | ||
Fidelity Telecom Services Central Fund (c) | 41,445 | 4,481,835 | ||
Fidelity Utilities Central Fund (c) | 51,414 | 5,918,278 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $170,457,600) | 174,730,896 | |||
Fixed-Income Central Funds - 26.9% | ||||
High Yield Fixed-Income Funds - 4.1% | ||||
Fidelity Floating Rate Central Fund (c) | 65,839 | 5,851,112 | ||
Fidelity High Income Central Fund 1 (c) | 53,887 | 5,000,129 | ||
TOTAL HIGH YIELD FIXED-INCOME FUNDS | 10,851,241 | |||
Investment Grade Fixed-Income Funds - 22.8% | ||||
Fidelity Tactical Income Central Fund (c) | 635,931 | 60,298,930 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $73,640,538) | 71,150,171 | |||
Money Market Central Funds - 7.6% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 20,135,950 | 20,135,950 | ||
U.S. Treasury Obligations - 0.6% | ||||
Principal Amount | Value | |||
U.S. Treasury Bills, yield at date of purchase 1.59% 6/5/08 (b) | $ 1,500,000 | $ 1,496,547 | ||
TOTAL INVESTMENT PORTFOLIO - 101.1% (Cost $265,729,740) | 267,513,564 | |||
NET OTHER ASSETS - (1.1)% | (2,943,036) | |||
NET ASSETS - 100% | $ 264,570,528 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
15 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 840,368 | $ 42,104 | ||
7 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 792,896 | (1,827) | ||
250 S&P 500 E-Mini Index Contracts | June 2008 | 16,550,000 | 336,659 | ||
7 TOPIX 150 Index Contracts (Japan) | June 2008 | 853,539 | 12,399 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 19,036,803 | $ 389,335 | |||
The face value of futures purchased as a percentage of net assets - 7.2% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $1,496,547. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site 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 | $ 707,694 |
Fidelity Consumer Discretionary Central Fund | 121,476 |
Fidelity Consumer Staples Central Fund | 136,320 |
Fidelity Energy Central Fund | 71,266 |
Fidelity Financials Central Fund | 396,383 |
Fidelity Floating Rate Central Fund | 236,983 |
Fidelity Health Care Central Fund | 94,187 |
Fidelity High Income Central Fund 1 | 197,619 |
Fidelity Industrials Central Fund | 140,667 |
Fidelity Information Technology Central Fund | 87,372 |
Fidelity International Equity Central Fund | 140,650 |
Fidelity Materials Central Fund | 65,769 |
Fidelity Securities Lending Cash Central Fund | 589 |
Fidelity Tactical Income Central Fund | 1,579,661 |
Fidelity Telecom Services Central Fund | 50,915 |
Fidelity Utilities Central Fund | 65,414 |
Total | $ 4,092,965 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ 17,245,921 | $ 816,093 | $ - | $ 15,139,887 | 2.5% |
Fidelity Consumer Staples Central Fund | 14,109,731 | 761,300 | - | 14,957,587 | 2.5% |
Fidelity Energy Central Fund | 17,891,901 | 981,100 | - | 19,353,790 | 2.5% |
Fidelity Financials Central Fund | 31,973,442 | 1,456,910 | - | 25,398,286 | 2.5% |
Fidelity Floating Rate Central Fund | 6,353,793 | 71,966 | - | 5,851,112 | 0.2% |
Fidelity Health Care Central Fund | 19,335,767 | 1,018,734 | - | 17,459,787 | 2.5% |
Fidelity High Income Central Fund 1 | 4,712,980 | 572,219 | - | 5,000,129 | 1.9% |
Fidelity Industrials Central Fund | 19,791,552 | 989,495 | - | 19,078,493 | 2.5% |
Fidelity Information Technology Central Fund | 27,717,788 | 1,249,190 | - | 22,666,166 | 2.5% |
Fidelity International Equity Central Fund | - | 27,886,922 | - | 23,989,264 | 3.1% |
Fidelity Materials Central Fund | 6,205,653 | 322,921 | - | 6,287,523 | 2.5% |
Fidelity Tactical Income Central Fund | 60,006,631 | 1,579,661 | - | 60,298,930 | 1.2% |
Fidelity Telecom Services Central Fund | 5,988,143 | 253,206 | - | 4,481,835 | 2.5% |
Fidelity Utilities Central Fund | 6,014,031 | 315,393 | - | 5,918,278 | 2.5% |
Total | $ 237,347,333 | $ 38,275,110 | $ - | $ 245,881,067 |
Other Information |
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 14.0% |
AAA,AA,A | 6.5% |
BBB | 4.4% |
BB | 2.6% |
B | 1.3% |
CCC,CC,C | 0.2% |
Not Rated | 0.1% |
Equities | 71.5% |
Short-Term Investments and Net Other Assets | (0.6)% |
100.0% |
We have used ratings from Moody's ® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 77.2% |
United Kingdom | 3.3% |
Japan | 2.2% |
Bermuda | 2.1% |
Switzerland | 1.7% |
Germany | 1.7% |
France | 1.6% |
Cayman Islands | 1.3% |
Canada | 1.1% |
Others (individually less than 1%) | 7.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $1,495,652) | $ 1,496,547 | |
Fidelity Central Funds (cost $264,234,088) | 266,017,017 | |
Total Investments (cost $265,729,740) | $ 267,513,564 | |
Foreign currency held at value (cost $27) | 27 | |
Receivable for fund shares sold | 605,198 | |
Dividends receivable | 93 | |
Distributions receivable from Fidelity Central Funds | 379,165 | |
Receivable for daily variation on futures contracts | 35,100 | |
Prepaid expenses | 684 | |
Other receivables | 1,127 | |
Total assets | 268,534,958 | |
Liabilities | ||
Payable for investments purchased | $ 252,318 | |
Payable for fund shares redeemed | 3,361,016 | |
Accrued management fee | 123,815 | |
Distribution fees payable | 114,078 | |
Other affiliated payables | 70,582 | |
Other payables and accrued expenses | 42,621 | |
Total liabilities | 3,964,430 | |
Net Assets | $ 264,570,528 | |
Net Assets consist of: | ||
Paid in capital | $ 277,272,249 | |
Undistributed net investment income | 821,525 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (15,694,435) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,171,189 | |
Net Assets | $ 264,570,528 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.01 | |
Maximum offering price per share (100/94.25 of $11.01) | $ 11.68 | |
Class T: | $ 10.96 | |
Maximum offering price per share (100/96.50 of $10.96) | $ 11.36 | |
Class B: | $ 10.89 | |
Class C: | $ 10.87 | |
Institutional Class: | $ 11.05 | |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended March 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 4,554 | |
Interest | 29,533 | |
Income from Fidelity Central Funds | 4,092,965 | |
Total income | 4,127,052 | |
Expenses | ||
Management fee | $ 788,271 | |
Transfer agent fees | 366,863 | |
Distribution fees | 742,297 | |
Accounting and security lending fees | 69,783 | |
Custodian fees and expenses | 16,588 | |
Independent trustees' compensation | 582 | |
Registration fees | 54,188 | |
Audit | 25,049 | |
Legal | 963 | |
Miscellaneous | 916 | |
Total expenses before reductions | 2,065,500 | |
Expense reductions | (13,627) | 2,051,873 |
Net investment income (loss) | 2,075,179 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $8,648) | 233,314 | |
Foreign currency transactions | (38,659) | |
Futures contracts | (2,239,677) | |
Total net realized gain (loss) | (2,045,022) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $4,378) | (30,439,728) | |
Assets and liabilities in foreign currencies | (1,910) | |
Futures contracts | (746,420) | |
Total change in net unrealized appreciation (depreciation) | (31,188,058) | |
Net gain (loss) | (33,233,080) | |
Net increase (decrease) in net assets resulting from operations | $ (31,157,901) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended March 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 2,075,179 | $ 4,445,631 |
Net realized gain (loss) | (2,045,022) | 4,267,233 |
Change in net unrealized appreciation (depreciation) | (31,188,058) | 25,556,999 |
Net increase (decrease) in net assets resulting | (31,157,901) | 34,269,863 |
Distributions to shareholders from net investment income | (2,838,777) | (4,327,004) |
Distributions to shareholders from net realized gain | (15,872,191) | (8,126,935) |
Total distributions | (18,710,968) | (12,453,939) |
Share transactions - net increase (decrease) | 21,019,103 | 39,052,304 |
Total increase (decrease) in net assets | (28,849,766) | 60,868,228 |
Net Assets | ||
Beginning of period | 293,420,294 | 232,552,066 |
End of period (including undistributed net investment income of $821,525 and undistributed net investment income of $1,585,123, respectively) | $ 264,570,528 | $ 293,420,294 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 13.12 | $ 12.10 | $ 12.48 | $ 11.10 | $ 9.93 | $ 8.77 | $ 9.83 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .10 | .25 | .17 | .10 | .08 | .12 | .15 |
Net realized and unrealized gain (loss) | (1.38) | 1.43 | .54 | 1.36 | 1.17 | 1.16 | (1.05) |
Total from investment operations | (1.28) | 1.68 | .71 | 1.46 | 1.25 | 1.28 | (.90) |
Distributions from net investment income | (.14) | (.25) | (.13) | (.08) | (.08) | (.12) | (.16) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.83) | (.66) | (1.09) | (.08) | (.08) | (.12) | (.16) |
Net asset value, end of period | $ 11.01 | $ 13.12 | $ 12.10 | $ 12.48 | $ 11.10 | $ 9.93 | $ 8.77 |
Total Return B, C, D | (10.29)% | 14.30% | 6.04% | 13.22% | 12.66% | 14.79% | (9.28)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.18% A | 1.18% | 1.24% A | 1.26% | 1.28% | 1.27% | 1.29% |
Expenses net of fee waivers, if any | 1.18% A | 1.18% | 1.24% A | 1.26% | 1.28% | 1.27% | 1.29% |
Expenses net of all reductions | 1.16% A | 1.17% | 1.22% A | 1.23% | 1.25% | 1.23% | 1.25% |
Net investment income (loss) | 1.75% A | 1.98% | 1.72% A | .85% | .75% | 1.33% | 1.65% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 112,953 | $ 122,510 | $ 76,226 | $ 52,137 | $ 36,512 | $ 36,234 | $ 29,894 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 13.05 | $ 12.05 | $ 12.42 | $ 11.05 | $ 9.90 | $ 8.75 | $ 9.79 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .09 | .21 | .14 | .07 | .05 | .09 | .13 |
Net realized and unrealized gain (loss) | (1.36) | 1.41 | .55 | 1.35 | 1.17 | 1.15 | (1.05) |
Total from investment operations | (1.27) | 1.62 | .69 | 1.42 | 1.22 | 1.24 | (.92) |
Distributions from net investment income | (.13) | (.21) | (.10) | (.05) | (.07) | (.09) | (.12) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.82) | (.62) | (1.06) | (.05) | (.07) | (.09) | (.12) |
Net asset value, end of period | $ 10.96 | $ 13.05 | $ 12.05 | $ 12.42 | $ 11.05 | $ 9.90 | $ 8.75 |
Total Return B, C, D | (10.32)% | 13.87% | 5.90% | 12.83% | 12.39% | 14.33% | (9.50)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.44% A | 1.45% | 1.50% A | 1.52% | 1.57% | 1.59% | 1.56% |
Expenses net of fee waivers, if any | 1.44% A | 1.45% | 1.50% A | 1.52% | 1.57% | 1.59% | 1.56% |
Expenses net of all reductions | 1.43% A | 1.44% | 1.48% A | 1.50% | 1.55% | 1.56% | 1.53% |
Net investment income (loss) | 1.48% A | 1.70% | 1.45% A | .58% | .46% | 1.00% | 1.38% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 65,220 | $ 71,580 | $ 72,582 | $ 62,862 | $ 57,816 | $ 54,298 | $ 45,804 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 12.97 | $ 11.99 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.73 | $ 9.78 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .06 | .14 | .09 | .01 | (.01) | .04 | .08 |
Net realized and unrealized gain (loss) | (1.36) | 1.41 | .55 | 1.34 | 1.17 | 1.15 | (1.05) |
Total from investment operations | (1.30) | 1.55 | .64 | 1.35 | 1.16 | 1.19 | (.97) |
Distributions from net investment income | (.09) | (.16) | (.05) | - | (.02) | (.05) | (.08) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.78) | (.57) | (1.01) | - | (.02) | (.05) | (.08) |
Net asset value, end of period | $ 10.89 | $ 12.97 | $ 11.99 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.73 |
Total Return B, C, D | (10.57)% | 13.26% | 5.45% | 12.26% | 11.77% | 13.72% | (10.00)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.97% A | 1.99% | 2.05% A | 2.08% | 2.14% | 2.12% | 2.10% |
Expenses net of fee waivers, if any | 1.97% A | 1.99% | 2.00% A | 2.04% | 2.14% | 2.12% | 2.10% |
Expenses net of all reductions | 1.97% A | 1.99% | 1.99% A | 2.01% | 2.11% | 2.08% | 2.06% |
Net investment income (loss) | .94% A | 1.16% | .95% A | .07% | (.11)% | .48% | .84% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 30,353 | $ 37,752 | $ 38,555 | $ 40,236 | $ 32,642 | $ 25,463 | $ 19,261 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 G | 2005 I | 2004 I | 2003 I | 2002 I | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 12.96 | $ 11.97 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.72 | $ 9.77 |
Income from Investment Operations | |||||||
Net investment income (loss) E | .06 | .15 | .09 | .01 | (.01) | .05 | .08 |
Net realized and unrealized gain (loss) | (1.36) | 1.41 | .54 | 1.35 | 1.17 | 1.15 | (1.05) |
Total from investment operations | (1.30) | 1.56 | .63 | 1.36 | 1.16 | 1.20 | (.97) |
Distributions from net investment income | (.10) | (.16) | (.06) | (.01) | (.02) | (.05) | (.08) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.79) | (.57) | (1.02) | (.01) | (.02) | (.05) | (.08) |
Net asset value, end of period | $ 10.87 | $ 12.96 | $ 11.97 | $ 12.36 | $ 11.01 | $ 9.87 | $ 8.72 |
Total Return B, C, D | (10.60)% | 13.43% | 5.37% | 12.31% | 11.77% | 13.85% | (10.01)% |
Ratios to Average Net Assets H | |||||||
Expenses before reductions | 1.91% A | 1.92% | 1.98% A | 2.02% | 2.08% | 2.08% | 2.07% |
Expenses net of fee waivers, if any | 1.91% A | 1.92% | 1.98% A | 2.02% | 2.08% | 2.08% | 2.07% |
Expenses net of all reductions | 1.90% A | 1.92% | 1.97% A | 1.99% | 2.05% | 2.05% | 2.03% |
Net investment income (loss) | 1.01% A | 1.23% | .97% A | .09% | (.05)% | .52% | .88% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 44,960 | $ 51,554 | $ 41,117 | $ 31,397 | $ 20,023 | $ 13,150 | $ 9,574 |
Portfolio turnover rate F | 11% A | 12% | 105% A, J | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. I For the year ended November 30. J Portfolio turnover rate excludes securities received or delivered in-kind |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Years ended September 30, | ||||||
(Unaudited) | 2007 | 2006 F | 2005 H | 2004 H | 2003 H | 2002 H | |
Selected Per-Share Data | |||||||
Net asset value, beginning of period | $ 13.16 | $ 12.14 | $ 12.51 | $ 11.14 | $ 9.95 | $ 8.78 | $ 9.85 |
Income from Investment Operations | |||||||
Net investment income (loss) D | .12 | .28 | .19 | .14 | .11 | .15 | .16 |
Net realized and unrealized gain (loss) | (1.38) | 1.42 | .56 | 1.36 | 1.19 | 1.15 | (1.04) |
Total from investment operations | (1.26) | 1.70 | .75 | 1.50 | 1.30 | 1.30 | (.88) |
Distributions from net investment income | (.16) | (.27) | (.16) | (.13) | (.11) | (.13) | (.19) |
Distributions from net realized gain | (.69) | (.41) | (.96) | - | - | - | - |
Total distributions | (.85) | (.68) | (1.12) | (.13) | (.11) | (.13) | (.19) |
Net asset value, end of period | $ 11.05 | $ 13.16 | $ 12.14 | $ 12.51 | $ 11.14 | $ 9.95 | $ 8.78 |
Total Return B, C | (10.13)% | 14.46% | 6.37% | 13.56% | 13.17% | 15.03% | (9.07)% |
Ratios to Average Net Assets G | |||||||
Expenses before reductions | .94% A | .96% | .97% A | .93% | .92% | 1.13% | 1.11% |
Expenses net of fee waivers, if any | .94% A | .96% | .97% A | .93% | .92% | 1.13% | 1.11% |
Expenses net of all reductions | .93% A | .95% | .96% A | .91% | .89% | 1.09% | 1.07% |
Net investment income (loss) | 1.98% A | 2.19% | 1.98% A | 1.17% | 1.11% | 1.47% | 1.84% |
Supplemental Data | |||||||
Net assets, end of period (000 omitted) | $ 11,084 | $ 10,024 | $ 4,072 | $ 1,768 | $ 787 | $ 707 | $ 5,359 |
Portfolio turnover rate E | 11% A | 12% | 105% A, I | 125% | 106% | 99% | 120% |
A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Amount does not include the portfolio activity of any underlying Fidelity Central Funds. FFor the ten month period ended September 30. The Fund changed its fiscal year from November 30 to September 30, effective September 30, 2006. 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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%. H For the year ended November 30. I Portfolio turnover rate excludes securities received or delivered in-kind. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Asset Manager 70% (the Fund) is a fund of Fidelity Charles 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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Repurchase Agreements Restricted Securities Loans & Direct Debt Instruments | Less than .01% to .02% | ||
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2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% | ||
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% | ||
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% | ||
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense | ||
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | Less than .01% | ||
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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.
Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds) and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 8,669,874 |
Unrealized depreciation | (17,557,408) |
Net unrealized appreciation (depreciation) | $ (8,887,534) |
Cost for federal income tax purposes | $ 276,401,098 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $38,951,420 and $13,241,182, respectively.
Semiannual Report
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 149,602 | $ 26,950 |
Class T | .25% | .25% | 172,066 | 306 |
Class B | .75% | .25% | 172,565 | 129,423 |
Class C | .75% | .25% | 248,064 | 43,741 |
$ 742,297 | $ 200,420 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 34,683 |
Class T | 13,292 |
Class B* | 31,613 |
Class C* | 4,710 |
$ 84,298 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC were as follows:
Amount | % of | |
Class A | $ 151,324 | .25 |
Class T | 91,120 | .26 |
Class B | 52,240 | .30 |
Class C | 57,909 | .23 |
Institutional Class | 14,270 | .27 |
$ 366,863 |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $13 for the period.
Semiannual Report
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $362 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $589.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $9,936 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | ||
Class A | $ 3,231 | |
Institutional Class | 460 | |
$ 3,691 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $15,668, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended March 31, | Year ended | ||||
From net investment income | |||||
Class A | $ 1,359,577 | $ 1,873,468 | |||
Class T | 693,146 | 1,281,836 | |||
Class B | 256,229 | 489,166 | |||
Class C | 394,498 | 591,916 | |||
Institutional Class | 135,327 | 90,618 | |||
Total | $ 2,838,777 | $ 4,327,004 | |||
Semiannual Report
11. Distributions to Shareholders - continued
Six months ended March 31, | Year ended | ||||
From net realized gain | |||||
Class A | $ 6,585,970 | $ 2,721,973 | |||
Class T | 3,833,169 | 2,507,451 | |||
Class B | 1,969,160 | 1,287,410 | |||
Class C | 2,852,871 | 1,480,024 | |||
Institutional Class | 631,021 | 130,077 | |||
Total | $ 15,872,191 | $ 8,126,935 | |||
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | ||||
Six months ended | Year ended | |||
Class A | ||||
Shares sold | 1,752,592 | 4,916,013 | ||
Reinvestment of distributions | 623,131 | 350,523 | ||
Shares redeemed | (1,459,177) | (2,225,378) | ||
Net increase (decrease) | 916,546 | 3,041,158 | ||
Class T | ||||
Shares sold | 631,546 | 1,257,577 | ||
Reinvestment of distributions | 365,770 | 304,675 | ||
Shares redeemed | (529,132) | (2,103,513) | ||
Net increase (decrease) | 468,184 | (541,261) | ||
Class B | ||||
Shares sold | 250,800 | 591,393 | ||
Reinvestment of distributions | 168,537 | 132,544 | ||
Shares redeemed | (541,739) | (1,030,307) | ||
Net increase (decrease) | (122,402) | (306,370) | ||
Class C | ||||
Shares sold | 485,746 | 1,051,849 | ||
Reinvestment of distributions | 242,645 | 154,127 | ||
Shares redeemed | (571,353) | (662,041) | ||
Net increase (decrease) | 157,038 | 543,935 | ||
Institutional Class | ||||
Shares sold | 329,202 | 549,314 | ||
Reinvestment of distributions | 60,344 | 15,792 | ||
Shares redeemed | (148,007) | (138,857) | ||
Net increase (decrease) | 241,539 | 426,249 | ||
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Dollars | |||
Six months ended March 31, | Year ended | ||
Class A | |||
Shares sold | $ 20,976,634 | $ 61,499,552 | |
Reinvestment of distributions | 7,563,940 | 4,311,917 | |
Shares redeemed | (17,174,030) | (27,985,899) | |
Net increase (decrease) | $ 11,366,544 | $ 37,825,570 | |
Class T | |||
Shares sold | $ 7,576,791 | $ 15,671,010 | |
Reinvestment of distributions | 4,417,441 | 3,720,662 | |
Shares redeemed | (6,297,449) | (26,430,266) | |
Net increase (decrease) | $ 5,696,783 | $ (7,038,594) | |
Class B | |||
Shares sold | $ 2,988,434 | $ 7,305,242 | |
Reinvestment of distributions | 2,021,728 | 1,607,140 | |
Shares redeemed | (6,318,880) | (12,777,362) | |
Net increase (decrease) | $ (1,308,718) | $ (3,864,980) | |
Class C | |||
Shares sold | $ 5,882,684 | $ 13,086,406 | |
Reinvestment of distributions | 2,906,442 | 1,870,578 | |
Shares redeemed | (6,541,042) | (8,207,622) | |
Net increase (decrease) | $ 2,248,084 | $ 6,749,362 | |
Institutional Class | |||
Shares sold | $ 4,016,768 | $ 6,935,534 | |
Reinvestment of distributions | 733,886 | 194,543 | |
Shares redeemed | (1,734,244) | (1,749,131) | |
Net increase (decrease) | $ 3,016,410 | $ 5,380,946 | |
13. Proposed Reorganization.
On May 15, 2008, the Board of Trustees of the Fund approved an Agreement and Plan of Reorganization between the Fund and Fidelity Asset Manager 70% Fund. The agreement provides for the transfer of all the assets and the assumption of all the liabilities of the Fund in exchange solely for the number of equivalent shares of Class A, Class T, Class B, Class C and Institutional Class (Advisor Classes) of Fidelity Asset Manager 70% Fund having the same aggregate net asset value as the outstanding shares of Class A, Class T, Class B, Class C and Institutional Class of the Fund on the day the reorganization is effective. The Advisor Classes of Fidelity Asset Manager 70% are being created for purposes of the reorganization and will not commence operations until the day of the reorganization.
Semiannual Report
13. Proposed Reorganization - continued
The reorganization, which does not require shareholder approval, is expected to become effective on or about September 26, 2008. The reorganization is expected to qualify as a tax-free transaction with no gain or loss recognized by the Funds or their shareholders.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments
Money Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
State Street Bank and Trust Company
Quincy, MA
AALI-USAN-0508
1.786776.105
(Fidelity Investment logo)(registered trademark)
Fidelity
Asset Manager® 85%
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 876.80 | $ 5.26 |
Hypothetical A | $ 1,000.00 | $ 1,019.40 | $ 5.65 |
Class T | |||
Actual | $ 1,000.00 | $ 875.90 | $ 6.47 |
Hypothetical A | $ 1,000.00 | $ 1,018.10 | $ 6.96 |
Class B | |||
Actual | $ 1,000.00 | $ 873.50 | $ 9.04 |
Hypothetical A | $ 1,000.00 | $ 1,015.35 | $ 9.72 |
Class C | |||
Actual | $ 1,000.00 | $ 873.50 | $ 8.85 |
Hypothetical A | $ 1,000.00 | $ 1,015.55 | $ 9.52 |
Asset Manager 85% | |||
Actual | $ 1,000.00 | $ 878.10 | $ 4.04 |
Hypothetical A | $ 1,000.00 | $ 1,020.70 | $ 4.34 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 878.20 | $ 3.76 |
Hypothetical A | $ 1,000.00 | $ 1,021.00 | $ 4.04 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.12% |
Class T | 1.38% |
Class B | 1.93% |
Class C | 1.89% |
Asset Manager 85% | .86% |
Institutional Class | .80% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 1.0 | 0.8 |
Procter & Gamble Co. | 1.0 | 0.9 |
Nintendo Co. Ltd. | 0.8 | 0.1 |
General Electric Co. | 0.7 | 0.8 |
JPMorgan Chase & Co. | 0.7 | 0.6 |
American International Group, Inc. | 0.7 | 0.7 |
The Coca-Cola Co. | 0.7 | 0.5 |
CVS Caremark Corp. | 0.7 | 0.4 |
Nestle SA (Reg.) | 0.6 | 0.2 |
PepsiCo, Inc. | 0.6 | 0.4 |
7.5 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and |  | Stock class and | ||||
| Bond class 12.5% | | Bond class 14.8% | ||||
| Short-term class 3.4% | | Short-term class 1.6% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity International Equity Central Fund | 13.0 |
Fidelity Financials Central Fund | 10.8 |
Fidelity Information Technology Central Fund | 9.6 |
Fidelity Energy Central Fund | 8.2 |
Fidelity Industrials Central Fund | 8.1 |
Fidelity Health Care Central Fund | 7.4 |
Fidelity Consumer Discretionary Central Fund | 6.4 |
Fidelity Consumer Staples Central Fund | 6.4 |
Fidelity Materials Central Fund | 2.7 |
Fidelity Utilities Central Fund | 2.5 |
Fidelity Telecom Services Central Fund | 1.9 |
Total Equity Central Funds | 77.0 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 10.4 |
High Yield Fixed-Income Funds | 1.1 |
Total Fixed-Income Central Funds | 11.5 |
Money Market Central Funds | 10.8 |
Other Short-Term Investments and Net Other Assets | 0.7 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 26.9% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 77.0% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 340,596 | $ 34,505,802 | ||
Fidelity Consumer Staples Central Fund (c) | 268,768 | 34,090,499 | ||
Fidelity Energy Central Fund (c) | 306,149 | 44,109,902 | ||
Fidelity Financials Central Fund (c) | 694,079 | 57,886,157 | ||
Fidelity Health Care Central Fund (c) | 388,606 | 39,793,203 | ||
Fidelity Industrials Central Fund (c) | 352,027 | 43,482,385 | ||
Fidelity Information Technology Central Fund (c) | 443,960 | 51,659,221 | ||
Fidelity International Equity Central Fund (c) | 819,300 | 69,869,904 | ||
Fidelity Materials Central Fund (c) | 101,546 | 14,330,145 | ||
Fidelity Telecom Services Central Fund (c) | 94,459 | 10,214,795 | ||
Fidelity Utilities Central Fund (c) | 117,180 | 13,488,630 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $407,729,742) | 413,430,643 | |||
Fixed-Income Central Funds - 11.5% | ||||
High Yield Fixed-Income Funds - 1.1% | ||||
Fidelity High Income Central Fund 1 (c) | 61,390 | 5,696,350 | ||
Investment Grade Fixed-Income Funds - 10.4% | ||||
Fidelity Tactical Income Central Fund (c) | 587,352 | 55,692,713 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $62,743,046) | 61,389,063 | |||
Money Market Central Funds - 10.8% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 57,693,032 | 57,693,032 | ||
U.S. Treasury Obligations - 0.6% | ||||
Principal Amount | Value | |||
U.S. Treasury Bills, yield at date of purchase 1.4% to 2.14% 4/17/08 to 6/5/08 (b) | $ 3,400,000 | $ 3,393,058 | ||
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $531,556,132) | 535,905,796 | |||
NET OTHER ASSETS - 0.1% | 775,151 | |||
NET ASSETS - 100% | $ 536,680,947 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
46 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 2,577,128 | $ 129,118 | ||
22 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 2,491,960 | (5,740) | ||
618 S&P 500 E-Mini Index Contracts | June 2008 | 40,911,600 | 963,105 | ||
22 TOPIX 150 Index Contracts (Japan) | June 2008 | 2,682,550 | 38,969 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 48,663,238 | $ 1,125,452 | |||
The face value of futures purchased as a percentage of net assets - 9.1% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $2,993,979. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,381,517 |
Fidelity Consumer Discretionary Central Fund | 279,530 |
Fidelity Consumer Staples Central Fund | 312,687 |
Fidelity Energy Central Fund | 163,442 |
Fidelity Financials Central Fund | 911,047 |
Fidelity Health Care Central Fund | 215,593 |
Fidelity High Income Central Fund 1 | 263,097 |
Fidelity Industrials Central Fund | 321,246 |
Fidelity Information Technology Central Fund | 200,529 |
Fidelity International Equity Central Fund | 408,570 |
Fidelity Materials Central Fund | 150,736 |
Fidelity Securities Lending Cash Central Fund | 4,304 |
Fidelity Tactical Income Central Fund | 1,698,343 |
Fidelity Telecom Services Central Fund | 116,762 |
Fidelity Utilities Central Fund | 150,739 |
Total | $ 6,578,142 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ 38,476,813 | $ 2,790,302 | $ - | $ 34,505,802 | 5.7% |
Fidelity Consumer Staples Central Fund | 31,481,455 | 2,407,026 | - | 34,090,499 | 5.7% |
Fidelity Energy Central Fund | 39,903,408 | 3,250,126 | - | 44,109,902 | 5.7% |
Fidelity Financials Central Fund | 71,344,905 | 5,019,654 | - | 57,886,157 | 5.7% |
Fidelity Health Care Central Fund | 43,134,603 | 3,253,549 | - | 39,793,203 | 5.7% |
Fidelity High Income Central Fund 1 | 8,946,922 | - | 2,899,743 | 5,696,350 | 2.2% |
Fidelity Industrials Central Fund | 44,167,755 | 3,293,245 | - | 43,482,385 | 5.7% |
Fidelity Information Technology Central Fund | 61,814,912 | 4,417,004 | - | 51,659,221 | 5.7% |
Fidelity International Equity Central Fund | - | 81,378,936 | - | 69,869,904 | 9.2% |
Fidelity Materials Central Fund | 13,842,100 | 1,069,489 | - | 14,330,145 | 5.7% |
Fidelity Tactical Income Central Fund | 65,379,747 | 1,698,343 | 9,980,134 | 55,692,713 | 1.1% |
Fidelity Telecom Services Central Fund | 13,358,236 | 898,652 | - | 10,214,795 | 5.7% |
Fidelity Utilities Central Fund | 13,416,809 | 1,007,810 | - | 13,488,630 | 5.7% |
Total | $ 445,267,665 | $ 110,484,136 | $ 12,879,877 | $ 474,819,706 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 6.4% |
AAA,AA,A | 3.1% |
BBB | 1.8% |
BB | 0.6% |
B | 0.4% |
CCC,CC,C | 0.1% |
Equities | 84.0% |
Short-Term Investments and Net Other Assets | 3.6% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 73.1% |
United Kingdom | 3.8% |
Japan | 2.9% |
Germany | 2.5% |
France | 2.3% |
Switzerland | 2.1% |
Bermuda | 2.0% |
Cayman Islands | 1.3% |
Canada | 1.2% |
Others (individually less than 1%) | 8.8% |
100.0% |
Income Tax Information |
At September 30, 2007, the fund had a capital loss carryforward of approximately $41,699,489 all of which will expire on September 30, 2011. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $3,390,312) | $ 3,393,058 | |
Fidelity Central Funds (cost $528,165,820) | 532,512,738 | |
Total Investments (cost $531,556,132) | $ 535,905,796 | |
Foreign currency held at value (cost $256,544) | 272,636 | |
Receivable for fund shares sold | 1,244,782 | |
Dividends receivable | 32,290 | |
Interest receivable | 1 | |
Distributions receivable from Fidelity Central Funds | 426,472 | |
Receivable for daily variation on futures contracts | 63,770 | |
Prepaid expenses | 1,391 | |
Other receivables | 3,400 | |
Total assets | 537,950,538 | |
Liabilities | ||
Payable for investments purchased | $ 252,147 | |
Payable for fund shares redeemed | 571,088 | |
Accrued management fee | 246,836 | |
Transfer agent fee payable | 109,994 | |
Distribution fees payable | 9,163 | |
Other affiliated payables | 16,926 | |
Other payables and accrued expenses | 63,437 | |
Total liabilities | 1,269,591 | |
Net Assets | $ 536,680,947 | |
Net Assets consist of: | ||
Paid in capital | $ 604,975,458 | |
Undistributed net investment income | 2,232,610 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (76,014,866) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 5,487,745 | |
Net Assets | $ 536,680,947 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.72 | |
Maximum offering price per share (100/94.25 of $12.72) | $ 13.50 | |
Class T: | $ 12.70 | |
Maximum offering price per share (100/96.50 of $12.70) | $ 13.16 | |
Class B: | $ 12.66 | |
Class C: | $ 12.63 | |
Asset Manager 85%: | $ 12.77 | |
Institutional Class: | $ 12.77 | |
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.
Semiannual Report
Statement of Operations
Six months ended March 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 18,391 | |
Interest | 66,733 | |
Income from Fidelity Central Funds | 6,578,142 | |
Total income | 6,663,266 | |
Expenses | ||
Management fee | $ 1,581,606 | |
Transfer agent fees | 674,530 | |
Distribution fees | 48,758 | |
Accounting and security lending fees | 106,762 | |
Custodian fees and expenses | 15,295 | |
Independent trustees' compensation | 1,163 | |
Registration fees | 38,779 | |
Audit | 36,046 | |
Legal | 2,403 | |
Miscellaneous | 1,776 | |
Total expenses before reductions | 2,507,118 | |
Expense reductions | (51,931) | 2,455,187 |
Net investment income (loss) | 4,208,079 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $41,077) | (858,351) | |
Fidelity Central Funds | (145,858) | |
Foreign currency transactions | (92,211) | |
Futures contracts | (6,755,394) | |
Total net realized gain (loss) | (7,851,814) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $20,675) | (69,457,342) | |
Assets and liabilities in foreign currencies | 18,519 | |
Futures contracts | (1,076,611) | |
Total change in net unrealized appreciation (depreciation) | (70,515,434) | |
Net gain (loss) | (78,367,248) | |
Net increase (decrease) in net assets resulting from operations | $ (74,159,169) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended March 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 4,208,079 | $ 8,364,040 |
Net realized gain (loss) | (7,851,814) | 16,447,618 |
Change in net unrealized appreciation (depreciation) | (70,515,434) | 57,830,856 |
Net increase (decrease) in net assets resulting | (74,159,169) | 82,642,514 |
Distributions to shareholders from net investment income | (9,363,481) | (7,445,590) |
Distributions to shareholders from net realized gain | (1,224,803) | (712,648) |
Total distributions | (10,588,284) | (8,158,238) |
Share transactions - net increase (decrease) | 30,756,659 | 67,356,167 |
Total increase (decrease) in net assets | (53,990,794) | 141,840,443 |
Net Assets | ||
Beginning of period | 590,671,741 | 448,831,298 |
End of period (including undistributed net investment income of $2,232,610 and undistributed net investment income of $7,388,012, respectively) | $ 536,680,947 | $ 590,671,741 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.77 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .08 | .19 |
Net realized and unrealized gain (loss) | (1.87) | 2.05 |
Total from investment operations | (1.79) | 2.24 |
Distributions from net investment income | (.23) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.26) | (.22) |
Net asset value, end of period | $ 12.72 | $ 14.77 |
Total Return B, C, D | (12.32)% | 17.78% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.12% A | 1.14% A |
Expenses net of fee waivers, if any | 1.12% A | 1.14% A |
Expenses net of all reductions | 1.10% A | 1.12% A |
Net investment income (loss) | 1.24% A | 1.36% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 11,219 | $ 7,348 |
Portfolio turnover rate F | 30% A | 31% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.74 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .07 | .15 |
Net realized and unrealized gain (loss) | (1.88) | 2.06 |
Total from investment operations | (1.81) | 2.21 |
Distributions from net investment income | (.20) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.23) | (.22) |
Net asset value, end of period | $ 12.70 | $ 14.74 |
Total Return B, C, D | (12.41)% | 17.46% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.38% A | 1.42% A |
Expenses net of fee waivers, if any | 1.38% A | 1.42% A |
Expenses net of all reductions | 1.37% A | 1.41% A |
Net investment income (loss) | .97% A | 1.07% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,691 | $ 1,792 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.69 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .03 | .08 |
Net realized and unrealized gain (loss) | (1.87) | 2.07 |
Total from investment operations | (1.84) | 2.15 |
Distributions from net investment income | (.16) | (.19) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.19) | (.21) |
Net asset value, end of period | $ 12.66 | $ 14.69 |
Total Return B, C, D | (12.65)% | 16.98% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.93% A | 1.93% A |
Expenses net of fee waivers, if any | 1.93% A | 1.93% A |
Expenses net of all reductions | 1.91% A | 1.92% A |
Net investment income (loss) | .43% A | .56% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,298 | $ 1,632 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.67 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .03 | .08 |
Net realized and unrealized gain (loss) | (1.86) | 2.06 |
Total from investment operations | (1.83) | 2.14 |
Distributions from net investment income | (.18) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.21) | (.22) |
Net asset value, end of period | $ 12.63 | $ 14.67 |
Total Return B, C, D | (12.65)% | 16.90% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.89% A | 1.91% A |
Expenses net of fee waivers, if any | 1.89% A | 1.91% A |
Expenses net of all reductions | 1.88% A | 1.90% A |
Net investment income (loss) | .46% A | .58% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 4,802 | $ 3,194 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 85%
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 14.81 | $ 12.79 | $ 11.69 | $ 10.29 | $ 9.26 | $ 6.79 |
Income from Investment | ||||||
Net investment income (loss) D | .10 | .23 | .18 | .06 F | .05 | .05 |
Net realized and unrealized gain (loss) | (1.88) | 2.02 | .98 | 1.40 | 1.04 | 2.49 |
Total from investment operations | (1.78) | 2.25 | 1.16 | 1.46 | 1.09 | 2.54 |
Distributions from net investment income | (.23) | (.21) | (.06) | (.06) | (.06) | (.07) |
Distributions from net realized gain | (.03) | (.02) | - | - | - | - |
Total distributions | (.26) | (.23) | (.06) | (.06) | (.06) | (.07) |
Net asset value, end of period | $ 12.77 | $ 14.81 | $ 12.79 | $ 11.69 | $ 10.29 | $ 9.26 |
Total Return B, C | (12.19)% | 17.77% | 9.95% | 14.22% | 11.79% | 37.74% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .86% A | .89% | .91% | .92% | .94% | 1.03% |
Expenses net of fee waivers, if any | .86% A | .87% | .91% | .92% | .94% | 1.03% |
Expenses net of all reductions | .84% A | .86% | .87% | .89% | .91% | 1.00% |
Net investment income (loss) | 1.50% A | 1.62% | 1.50% | .53% F | .52% | .63% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $ 515,388 | $ 576,458 | $ 448,831 | $ 403,221 | $ 352,600 | $ 250,354 |
Portfolio turnover rate E | 30% A | 31% | 187% H | 71% H | 86% | 131% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $.02 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.82 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) D | .11 | .23 |
Net realized and unrealized gain (loss) | (1.89) | 2.07 |
Total from investment operations | (1.78) | 2.30 |
Distributions from net investment income | (.24) | (.21) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.27) | (.23) |
Net asset value, end of period | $ 12.77 | $ 14.82 |
Total Return B, C | (12.18)% | 18.24% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .80% A | .82% A |
Expenses net of fee waivers, if any | .80% A | .82% A |
Expenses net of all reductions | .78% A | .81% A |
Net investment income (loss) | 1.56% A | 1.67% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 283 | $ 247 |
Portfolio turnover rate E | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 85% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 85% and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Repurchase Agreements Restricted Securities Loans & Direct Debt Instruments | Less than .01% to .02% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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.
Semiannual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds), capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 20,365,062 | |
Unrealized depreciation | (39,531,095) | |
Net unrealized appreciation (depreciation) | $ (19,166,033) | |
Cost for federal income tax purposes | $ 555,071,829 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts."
This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $114,413,805 and $75,609,143, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 11,813 | $ 1,430 |
Class T | .25% | .25% | 6,094 | 252 |
Class B | .75% | .25% | 9,886 | 7,542 |
Class C | .75% | .25% | 20,965 | 15,814 |
$ 48,758 | $ 25,038 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 18,926 |
Class T | 2,401 |
Class B* | 251 |
Class C* | 796 |
$ 22,374 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 85% shares. For the period, each class paid the following transfer agent fees:
Amount | % of | |
Class A | $ 11,382 | .24 |
Class T | 3,090 | .25 |
Class B | 2,917 | .30 |
Class C | 5,397 | .26 |
Asset Manager 85% | 651,529 | .24 |
Institutional Class | 215 | .17 |
$ 674,530 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $66 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $715 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day.
If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $4,304.
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 85% operating expenses. During the period, this reimbursement reduced the Class' expenses by $9,680.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $34,410 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $228.
Semiannual Report
9. Expense Reductions - continued
During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | ||
Class A | $ 192 | |
Asset Manager 85% | 7,419 | |
Institutional Class | 2 | |
$ 7,613 |
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $59,143, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 150,986 | $ 3,111 |
Class T | 34,666 | 3,070 |
Class B | 23,020 | 2,303 |
Class C | 54,595 | 5,563 |
Asset Manager 85% | 9,096,274 | 7,429,888 |
Institutional Class | 3,940 | 1,655 |
Total | $ 9,363,481 | $ 7,445,590 |
From net realized gain | ||
Class A | $ 20,022 | $ 362 |
Class T | 5,093 | 315 |
Class B | 4,288 | 249 |
Class C | 9,298 | 571 |
Asset Manager 85% | 1,185,614 | 710,994 |
Institutional Class | 488 | 157 |
Total | $ 1,224,803 | $ 712,648 |
A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class A | ||||
Shares sold | 439,896 | 533,617 | $ 6,066,195 | $ 7,482,672 |
Reinvestment of distributions | 11,613 | 259 | 164,450 | 3,472 |
Shares redeemed | (67,235) | (36,450) | (927,772) | (505,258) |
Net increase (decrease) | 384,274 | 497,426 | $ 5,302,873 | $ 6,980,886 |
Class T | ||||
Shares sold | 115,381 | 132,362 | $ 1,608,085 | $ 1,878,689 |
Reinvestment of distributions | 2,802 | 252 | 39,626 | 3,385 |
Shares redeemed | (27,889) | (11,048) | (368,614) | (158,492) |
Net increase (decrease) | 90,294 | 121,566 | $ 1,279,097 | $ 1,723,582 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class B | ||||
Shares sold | 81,605 | 113,822 | $ 1,117,865 | $ 1,577,374 |
Reinvestment of distributions | 1,841 | 179 | 26,000 | 2,400 |
Shares redeemed | (13,072) | (2,876) | (179,022) | (40,678) |
Net increase (decrease) | 70,374 | 111,125 | $ 964,843 | $ 1,539,096 |
Class C | ||||
Shares sold | 181,906 | 228,834 | $ 2,522,653 | $ 3,208,263 |
Reinvestment of distributions | 3,034 | 447 | 42,720 | 5,995 |
Shares redeemed | (22,405) | (11,500) | (296,002) | (161,700) |
Net increase (decrease) | 162,535 | 217,781 | $ 2,269,371 | $ 3,052,558 |
Asset Manager 85% | ||||
Shares sold | 6,644,681 | 11,993,958 | $ 92,663,890 | $ 166,840,157 |
Reinvestment of distributions | 709,187 | 595,752 | 10,063,914 | 7,989,027 |
Shares redeemed | (5,913,286) | (8,742,465) | (81,857,348) | (120,993,870) |
Net increase (decrease) | 1,440,582 | 3,847,245 | $ 20,870,456 | $ 53,835,314 |
Institutional Class | ||||
Shares sold | 6,596 | 16,534 | $ 86,489 | $ 222,919 |
Reinvestment of distributions | 180 | 135 | 2,553 | 1,812 |
Shares redeemed | (1,277) | - | (19,023) | - |
Net increase (decrease) | 5,499 | 16,669 | $ 70,019 | $ 224,731 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
(for the deaf and hearing impaired)
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
AGG-USAN-0508
1.792153.104
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager® 85% -
Class A, Class T, Class B
and Class C
Semiannual Report
March 31, 2008
Class A, Class T, Class B, and Class C are classes of Fidelity
Asset Manager® 85%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 876.80 | $ 5.26 |
Hypothetical A | $ 1,000.00 | $ 1,019.40 | $ 5.65 |
Class T | |||
Actual | $ 1,000.00 | $ 875.90 | $ 6.47 |
Hypothetical A | $ 1,000.00 | $ 1,018.10 | $ 6.96 |
Class B | |||
Actual | $ 1,000.00 | $ 873.50 | $ 9.04 |
Hypothetical A | $ 1,000.00 | $ 1,015.35 | $ 9.72 |
Class C | |||
Actual | $ 1,000.00 | $ 873.50 | $ 8.85 |
Hypothetical A | $ 1,000.00 | $ 1,015.55 | $ 9.52 |
Asset Manager 85% | |||
Actual | $ 1,000.00 | $ 878.10 | $ 4.04 |
Hypothetical A | $ 1,000.00 | $ 1,020.70 | $ 4.34 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 878.20 | $ 3.76 |
Hypothetical A | $ 1,000.00 | $ 1,021.00 | $ 4.04 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.12% |
Class T | 1.38% |
Class B | 1.93% |
Class C | 1.89% |
Asset Manager 85% | .86% |
Institutional Class | .80% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 1.0 | 0.8 |
Procter & Gamble Co. | 1.0 | 0.9 |
Nintendo Co. Ltd. | 0.8 | 0.1 |
General Electric Co. | 0.7 | 0.8 |
JPMorgan Chase & Co. | 0.7 | 0.6 |
American International Group, Inc. | 0.7 | 0.7 |
The Coca-Cola Co. | 0.7 | 0.5 |
CVS Caremark Corp. | 0.7 | 0.4 |
Nestle SA (Reg.) | 0.6 | 0.2 |
PepsiCo, Inc. | 0.6 | 0.4 |
7.5 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 12.5% | | Bond class 14.8% | ||||
| Short-term class 3.4% | | Short-term class 1.6% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity International Equity Central Fund | 13.0 |
Fidelity Financials Central Fund | 10.8 |
Fidelity Information Technology Central Fund | 9.6 |
Fidelity Energy Central Fund | 8.2 |
Fidelity Industrials Central Fund | 8.1 |
Fidelity Health Care Central Fund | 7.4 |
Fidelity Consumer Discretionary Central Fund | 6.4 |
Fidelity Consumer Staples Central Fund | 6.4 |
Fidelity Materials Central Fund | 2.7 |
Fidelity Utilities Central Fund | 2.5 |
Fidelity Telecom Services Central Fund | 1.9 |
Total Equity Central Funds | 77.0 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 10.4 |
High Yield Fixed-Income Funds | 1.1 |
Total Fixed-Income Central Funds | 11.5 |
Money Market Central Funds | 10.8 |
Other Short-Term Investments and Net Other Assets | 0.7 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 26.9% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 77.0% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 340,596 | $ 34,505,802 | ||
Fidelity Consumer Staples Central Fund (c) | 268,768 | 34,090,499 | ||
Fidelity Energy Central Fund (c) | 306,149 | 44,109,902 | ||
Fidelity Financials Central Fund (c) | 694,079 | 57,886,157 | ||
Fidelity Health Care Central Fund (c) | 388,606 | 39,793,203 | ||
Fidelity Industrials Central Fund (c) | 352,027 | 43,482,385 | ||
Fidelity Information Technology Central Fund (c) | 443,960 | 51,659,221 | ||
Fidelity International Equity Central Fund (c) | 819,300 | 69,869,904 | ||
Fidelity Materials Central Fund (c) | 101,546 | 14,330,145 | ||
Fidelity Telecom Services Central Fund (c) | 94,459 | 10,214,795 | ||
Fidelity Utilities Central Fund (c) | 117,180 | 13,488,630 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $407,729,742) | 413,430,643 | |||
Fixed-Income Central Funds - 11.5% | ||||
High Yield Fixed-Income Funds - 1.1% | ||||
Fidelity High Income Central Fund 1 (c) | 61,390 | 5,696,350 | ||
Investment Grade Fixed-Income Funds - 10.4% | ||||
Fidelity Tactical Income Central Fund (c) | 587,352 | 55,692,713 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $62,743,046) | 61,389,063 | |||
Money Market Central Funds - 10.8% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 57,693,032 | 57,693,032 | ||
U.S. Treasury Obligations - 0.6% | ||||
Principal Amount | Value | |||
U.S. Treasury Bills, yield at date of purchase 1.4% to 2.14% 4/17/08 to 6/5/08 (b) | $ 3,400,000 | $ 3,393,058 | ||
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $531,556,132) | 535,905,796 | |||
NET OTHER ASSETS - 0.1% | 775,151 | |||
NET ASSETS - 100% | $ 536,680,947 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
46 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 2,577,128 | $ 129,118 | ||
22 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 2,491,960 | (5,740) | ||
618 S&P 500 E-Mini Index Contracts | June 2008 | 40,911,600 | 963,105 | ||
22 TOPIX 150 Index Contracts (Japan) | June 2008 | 2,682,550 | 38,969 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 48,663,238 | $ 1,125,452 | |||
The face value of futures purchased as a percentage of net assets - 9.1% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $2,993,979. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,381,517 |
Fidelity Consumer Discretionary Central Fund | 279,530 |
Fidelity Consumer Staples Central Fund | 312,687 |
Fidelity Energy Central Fund | 163,442 |
Fidelity Financials Central Fund | 911,047 |
Fidelity Health Care Central Fund | 215,593 |
Fidelity High Income Central Fund 1 | 263,097 |
Fidelity Industrials Central Fund | 321,246 |
Fidelity Information Technology Central Fund | 200,529 |
Fidelity International Equity Central Fund | 408,570 |
Fidelity Materials Central Fund | 150,736 |
Fidelity Securities Lending Cash Central Fund | 4,304 |
Fidelity Tactical Income Central Fund | 1,698,343 |
Fidelity Telecom Services Central Fund | 116,762 |
Fidelity Utilities Central Fund | 150,739 |
Total | $ 6,578,142 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ 38,476,813 | $ 2,790,302 | $ - | $ 34,505,802 | 5.7% |
Fidelity Consumer Staples Central Fund | 31,481,455 | 2,407,026 | - | 34,090,499 | 5.7% |
Fidelity Energy Central Fund | 39,903,408 | 3,250,126 | - | 44,109,902 | 5.7% |
Fidelity Financials Central Fund | 71,344,905 | 5,019,654 | - | 57,886,157 | 5.7% |
Fidelity Health Care Central Fund | 43,134,603 | 3,253,549 | - | 39,793,203 | 5.7% |
Fidelity High Income Central Fund 1 | 8,946,922 | - | 2,899,743 | 5,696,350 | 2.2% |
Fidelity Industrials Central Fund | 44,167,755 | 3,293,245 | - | 43,482,385 | 5.7% |
Fidelity Information Technology Central Fund | 61,814,912 | 4,417,004 | - | 51,659,221 | 5.7% |
Fidelity International Equity Central Fund | - | 81,378,936 | - | 69,869,904 | 9.2% |
Fidelity Materials Central Fund | 13,842,100 | 1,069,489 | - | 14,330,145 | 5.7% |
Fidelity Tactical Income Central Fund | 65,379,747 | 1,698,343 | 9,980,134 | 55,692,713 | 1.1% |
Fidelity Telecom Services Central Fund | 13,358,236 | 898,652 | - | 10,214,795 | 5.7% |
Fidelity Utilities Central Fund | 13,416,809 | 1,007,810 | - | 13,488,630 | 5.7% |
Total | $ 445,267,665 | $ 110,484,136 | $ 12,879,877 | $ 474,819,706 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 6.4% |
AAA,AA,A | 3.1% |
BBB | 1.8% |
BB | 0.6% |
B | 0.4% |
CCC,CC,C | 0.1% |
Equities | 84.0% |
Short-Term Investments and Net Other Assets | 3.6% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 73.1% |
United Kingdom | 3.8% |
Japan | 2.9% |
Germany | 2.5% |
France | 2.3% |
Switzerland | 2.1% |
Bermuda | 2.0% |
Cayman Islands | 1.3% |
Canada | 1.2% |
Others (individually less than 1%) | 8.8% |
100.0% |
Income Tax Information |
At September 30, 2007, the fund had a capital loss carryforward of approximately $41,699,489 all of which will expire on September 30, 2011. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $3,390,312) | $ 3,393,058 | |
Fidelity Central Funds (cost $528,165,820) | 532,512,738 | |
Total Investments (cost $531,556,132) | $ 535,905,796 | |
Foreign currency held at value (cost $256,544) | 272,636 | |
Receivable for fund shares sold | 1,244,782 | |
Dividends receivable | 32,290 | |
Interest receivable | 1 | |
Distributions receivable from Fidelity Central Funds | 426,472 | |
Receivable for daily variation on futures contracts | 63,770 | |
Prepaid expenses | 1,391 | |
Other receivables | 3,400 | |
Total assets | 537,950,538 | |
Liabilities | ||
Payable for investments purchased | $ 252,147 | |
Payable for fund shares redeemed | 571,088 | |
Accrued management fee | 246,836 | |
Transfer agent fee payable | 109,994 | |
Distribution fees payable | 9,163 | |
Other affiliated payables | 16,926 | |
Other payables and accrued expenses | 63,437 | |
Total liabilities | 1,269,591 | |
Net Assets | $ 536,680,947 | |
Net Assets consist of: | ||
Paid in capital | $ 604,975,458 | |
Undistributed net investment income | 2,232,610 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (76,014,866) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 5,487,745 | |
Net Assets | $ 536,680,947 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.72 | |
Maximum offering price per share (100/94.25 of $12.72) | $ 13.50 | |
Class T: | $ 12.70 | |
Maximum offering price per share (100/96.50 of $12.70) | $ 13.16 | |
Class B: | $ 12.66 | |
Class C: | $ 12.63 | |
Asset Manager 85%: | $ 12.77 | |
Institutional Class: | $ 12.77 | |
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.
Semiannual Report
Statement of Operations
Six months ended March 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 18,391 | |
Interest | 66,733 | |
Income from Fidelity Central Funds | 6,578,142 | |
Total income | 6,663,266 | |
Expenses | ||
Management fee | $ 1,581,606 | |
Transfer agent fees | 674,530 | |
Distribution fees | 48,758 | |
Accounting and security lending fees | 106,762 | |
Custodian fees and expenses | 15,295 | |
Independent trustees' compensation | 1,163 | |
Registration fees | 38,779 | |
Audit | 36,046 | |
Legal | 2,403 | |
Miscellaneous | 1,776 | |
Total expenses before reductions | 2,507,118 | |
Expense reductions | (51,931) | 2,455,187 |
Net investment income (loss) | 4,208,079 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $41,077) | (858,351) | |
Fidelity Central Funds | (145,858) | |
Foreign currency transactions | (92,211) | |
Futures contracts | (6,755,394) | |
Total net realized gain (loss) | (7,851,814) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $20,675) | (69,457,342) | |
Assets and liabilities in foreign currencies | 18,519 | |
Futures contracts | (1,076,611) | |
Total change in net unrealized appreciation (depreciation) | (70,515,434) | |
Net gain (loss) | (78,367,248) | |
Net increase (decrease) in net assets resulting from operations | $ (74,159,169) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended March 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 4,208,079 | $ 8,364,040 |
Net realized gain (loss) | (7,851,814) | 16,447,618 |
Change in net unrealized appreciation (depreciation) | (70,515,434) | 57,830,856 |
Net increase (decrease) in net assets resulting | (74,159,169) | 82,642,514 |
Distributions to shareholders from net investment income | (9,363,481) | (7,445,590) |
Distributions to shareholders from net realized gain | (1,224,803) | (712,648) |
Total distributions | (10,588,284) | (8,158,238) |
Share transactions - net increase (decrease) | 30,756,659 | 67,356,167 |
Total increase (decrease) in net assets | (53,990,794) | 141,840,443 |
Net Assets | ||
Beginning of period | 590,671,741 | 448,831,298 |
End of period (including undistributed net investment income of $2,232,610 and undistributed net investment income of $7,388,012, respectively) | $ 536,680,947 | $ 590,671,741 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.77 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .08 | .19 |
Net realized and unrealized gain (loss) | (1.87) | 2.05 |
Total from investment operations | (1.79) | 2.24 |
Distributions from net investment income | (.23) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.26) | (.22) |
Net asset value, end of period | $ 12.72 | $ 14.77 |
Total Return B, C, D | (12.32)% | 17.78% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.12% A | 1.14% A |
Expenses net of fee waivers, if any | 1.12% A | 1.14% A |
Expenses net of all reductions | 1.10% A | 1.12% A |
Net investment income (loss) | 1.24% A | 1.36% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 11,219 | $ 7,348 |
Portfolio turnover rate F | 30% A | 31% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.74 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .07 | .15 |
Net realized and unrealized gain (loss) | (1.88) | 2.06 |
Total from investment operations | (1.81) | 2.21 |
Distributions from net investment income | (.20) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.23) | (.22) |
Net asset value, end of period | $ 12.70 | $ 14.74 |
Total Return B, C, D | (12.41)% | 17.46% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.38% A | 1.42% A |
Expenses net of fee waivers, if any | 1.38% A | 1.42% A |
Expenses net of all reductions | 1.37% A | 1.41% A |
Net investment income (loss) | .97% A | 1.07% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,691 | $ 1,792 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.69 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .03 | .08 |
Net realized and unrealized gain (loss) | (1.87) | 2.07 |
Total from investment operations | (1.84) | 2.15 |
Distributions from net investment income | (.16) | (.19) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.19) | (.21) |
Net asset value, end of period | $ 12.66 | $ 14.69 |
Total Return B, C, D | (12.65)% | 16.98% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.93% A | 1.93% A |
Expenses net of fee waivers, if any | 1.93% A | 1.93% A |
Expenses net of all reductions | 1.91% A | 1.92% A |
Net investment income (loss) | .43% A | .56% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,298 | $ 1,632 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.67 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .03 | .08 |
Net realized and unrealized gain (loss) | (1.86) | 2.06 |
Total from investment operations | (1.83) | 2.14 |
Distributions from net investment income | (.18) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.21) | (.22) |
Net asset value, end of period | $ 12.63 | $ 14.67 |
Total Return B, C, D | (12.65)% | 16.90% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.89% A | 1.91% A |
Expenses net of fee waivers, if any | 1.89% A | 1.91% A |
Expenses net of all reductions | 1.88% A | 1.90% A |
Net investment income (loss) | .46% A | .58% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 4,802 | $ 3,194 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 85%
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 14.81 | $ 12.79 | $ 11.69 | $ 10.29 | $ 9.26 | $ 6.79 |
Income from Investment | ||||||
Net investment income (loss) D | .10 | .23 | .18 | .06 F | .05 | .05 |
Net realized and unrealized gain (loss) | (1.88) | 2.02 | .98 | 1.40 | 1.04 | 2.49 |
Total from investment operations | (1.78) | 2.25 | 1.16 | 1.46 | 1.09 | 2.54 |
Distributions from net investment income | (.23) | (.21) | (.06) | (.06) | (.06) | (.07) |
Distributions from net realized gain | (.03) | (.02) | - | - | - | - |
Total distributions | (.26) | (.23) | (.06) | (.06) | (.06) | (.07) |
Net asset value, end of period | $ 12.77 | $ 14.81 | $ 12.79 | $ 11.69 | $ 10.29 | $ 9.26 |
Total Return B, C | (12.19)% | 17.77% | 9.95% | 14.22% | 11.79% | 37.74% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .86% A | .89% | .91% | .92% | .94% | 1.03% |
Expenses net of fee waivers, if any | .86% A | .87% | .91% | .92% | .94% | 1.03% |
Expenses net of all reductions | .84% A | .86% | .87% | .89% | .91% | 1.00% |
Net investment income (loss) | 1.50% A | 1.62% | 1.50% | .53% F | .52% | .63% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $ 515,388 | $ 576,458 | $ 448,831 | $ 403,221 | $ 352,600 | $ 250,354 |
Portfolio turnover rate E | 30% A | 31% | 187% H | 71% H | 86% | 131% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $.02 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.82 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) D | .11 | .23 |
Net realized and unrealized gain (loss) | (1.89) | 2.07 |
Total from investment operations | (1.78) | 2.30 |
Distributions from net investment income | (.24) | (.21) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.27) | (.23) |
Net asset value, end of period | $ 12.77 | $ 14.82 |
Total Return B, C | (12.18)% | 18.24% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .80% A | .82% A |
Expenses net of fee waivers, if any | .80% A | .82% A |
Expenses net of all reductions | .78% A | .81% A |
Net investment income (loss) | 1.56% A | 1.67% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 283 | $ 247 |
Portfolio turnover rate E | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 85% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 85% and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Repurchase Agreements Restricted Securities Loans & Direct Debt Instruments | Less than .01% to .02% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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.
Semiannual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds), capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 20,365,062 | |
Unrealized depreciation | (39,531,095) | |
Net unrealized appreciation (depreciation) | $ (19,166,033) | |
Cost for federal income tax purposes | $ 555,071,829 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts."
This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $114,413,805 and $75,609,143, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 11,813 | $ 1,430 |
Class T | .25% | .25% | 6,094 | 252 |
Class B | .75% | .25% | 9,886 | 7,542 |
Class C | .75% | .25% | 20,965 | 15,814 |
$ 48,758 | $ 25,038 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 18,926 |
Class T | 2,401 |
Class B* | 251 |
Class C* | 796 |
$ 22,374 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 85% shares. For the period, each class paid the following transfer agent fees:
Amount | % of | |
Class A | $ 11,382 | .24 |
Class T | 3,090 | .25 |
Class B | 2,917 | .30 |
Class C | 5,397 | .26 |
Asset Manager 85% | 651,529 | .24 |
Institutional Class | 215 | .17 |
$ 674,530 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $66 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $715 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day.
If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $4,304.
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 85% operating expenses. During the period, this reimbursement reduced the Class' expenses by $9,680.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $34,410 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $228.
Semiannual Report
9. Expense Reductions - continued
During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | ||
Class A | $ 192 | |
Asset Manager 85% | 7,419 | |
Institutional Class | 2 | |
$ 7,613 |
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $59,143, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 150,986 | $ 3,111 |
Class T | 34,666 | 3,070 |
Class B | 23,020 | 2,303 |
Class C | 54,595 | 5,563 |
Asset Manager 85% | 9,096,274 | 7,429,888 |
Institutional Class | 3,940 | 1,655 |
Total | $ 9,363,481 | $ 7,445,590 |
From net realized gain | ||
Class A | $ 20,022 | $ 362 |
Class T | 5,093 | 315 |
Class B | 4,288 | 249 |
Class C | 9,298 | 571 |
Asset Manager 85% | 1,185,614 | 710,994 |
Institutional Class | 488 | 157 |
Total | $ 1,224,803 | $ 712,648 |
A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class A | ||||
Shares sold | 439,896 | 533,617 | $ 6,066,195 | $ 7,482,672 |
Reinvestment of distributions | 11,613 | 259 | 164,450 | 3,472 |
Shares redeemed | (67,235) | (36,450) | (927,772) | (505,258) |
Net increase (decrease) | 384,274 | 497,426 | $ 5,302,873 | $ 6,980,886 |
Class T | ||||
Shares sold | 115,381 | 132,362 | $ 1,608,085 | $ 1,878,689 |
Reinvestment of distributions | 2,802 | 252 | 39,626 | 3,385 |
Shares redeemed | (27,889) | (11,048) | (368,614) | (158,492) |
Net increase (decrease) | 90,294 | 121,566 | $ 1,279,097 | $ 1,723,582 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class B | ||||
Shares sold | 81,605 | 113,822 | $ 1,117,865 | $ 1,577,374 |
Reinvestment of distributions | 1,841 | 179 | 26,000 | 2,400 |
Shares redeemed | (13,072) | (2,876) | (179,022) | (40,678) |
Net increase (decrease) | 70,374 | 111,125 | $ 964,843 | $ 1,539,096 |
Class C | ||||
Shares sold | 181,906 | 228,834 | $ 2,522,653 | $ 3,208,263 |
Reinvestment of distributions | 3,034 | 447 | 42,720 | 5,995 |
Shares redeemed | (22,405) | (11,500) | (296,002) | (161,700) |
Net increase (decrease) | 162,535 | 217,781 | $ 2,269,371 | $ 3,052,558 |
Asset Manager 85% | ||||
Shares sold | 6,644,681 | 11,993,958 | $ 92,663,890 | $ 166,840,157 |
Reinvestment of distributions | 709,187 | 595,752 | 10,063,914 | 7,989,027 |
Shares redeemed | (5,913,286) | (8,742,465) | (81,857,348) | (120,993,870) |
Net increase (decrease) | 1,440,582 | 3,847,245 | $ 20,870,456 | $ 53,835,314 |
Institutional Class | ||||
Shares sold | 6,596 | 16,534 | $ 86,489 | $ 222,919 |
Reinvestment of distributions | 180 | 135 | 2,553 | 1,812 |
Shares redeemed | (1,277) | - | (19,023) | - |
Net increase (decrease) | 5,499 | 16,669 | $ 70,019 | $ 224,731 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money
Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis
Company
Fidelity International
Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AAM85-USAN-0508
1.834356.101
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Asset Manager® 85% -
Institutional Class
Semiannual Report
March 31, 2008
Institutional Class is a class of
Fidelity Asset Manager® 85%
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investment Summary | A summary of the fund's holdings. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company, (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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 (October 1, 2007 to March 31, 2008).
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.
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 876.80 | $ 5.26 |
Hypothetical A | $ 1,000.00 | $ 1,019.40 | $ 5.65 |
Class T | |||
Actual | $ 1,000.00 | $ 875.90 | $ 6.47 |
Hypothetical A | $ 1,000.00 | $ 1,018.10 | $ 6.96 |
Class B | |||
Actual | $ 1,000.00 | $ 873.50 | $ 9.04 |
Hypothetical A | $ 1,000.00 | $ 1,015.35 | $ 9.72 |
Class C | |||
Actual | $ 1,000.00 | $ 873.50 | $ 8.85 |
Hypothetical A | $ 1,000.00 | $ 1,015.55 | $ 9.52 |
Asset Manager 85% | |||
Actual | $ 1,000.00 | $ 878.10 | $ 4.04 |
Hypothetical A | $ 1,000.00 | $ 1,020.70 | $ 4.34 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 878.20 | $ 3.76 |
Hypothetical A | $ 1,000.00 | $ 1,021.00 | $ 4.04 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Annualized | |
Class A | 1.12% |
Class T | 1.38% |
Class B | 1.93% |
Class C | 1.89% |
Asset Manager 85% | .86% |
Institutional Class | .80% |
In addition to the expenses noted above, the Fund also indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half-year ranged from less than .01% to .02%.
Semiannual Report
Investment Changes (Unaudited)
The information in following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 1.0 | 0.8 |
Procter & Gamble Co. | 1.0 | 0.9 |
Nintendo Co. Ltd. | 0.8 | 0.1 |
General Electric Co. | 0.7 | 0.8 |
JPMorgan Chase & Co. | 0.7 | 0.6 |
American International Group, Inc. | 0.7 | 0.7 |
The Coca-Cola Co. | 0.7 | 0.5 |
CVS Caremark Corp. | 0.7 | 0.4 |
Nestle SA (Reg.) | 0.6 | 0.2 |
PepsiCo, Inc. | 0.6 | 0.4 |
7.5 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stock class and | | Stock class and | ||||
| Bond class 12.5% | | Bond class 14.8% | ||||
| Short-term class 3.4% | | Short-term class 1.6% | ||||
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Semiannual Report
Investment Summary (Unaudited)
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Central Funds | |
Fidelity International Equity Central Fund | 13.0 |
Fidelity Financials Central Fund | 10.8 |
Fidelity Information Technology Central Fund | 9.6 |
Fidelity Energy Central Fund | 8.2 |
Fidelity Industrials Central Fund | 8.1 |
Fidelity Health Care Central Fund | 7.4 |
Fidelity Consumer Discretionary Central Fund | 6.4 |
Fidelity Consumer Staples Central Fund | 6.4 |
Fidelity Materials Central Fund | 2.7 |
Fidelity Utilities Central Fund | 2.5 |
Fidelity Telecom Services Central Fund | 1.9 |
Total Equity Central Funds | 77.0 |
Fixed-Income Central Funds | |
Investment Grade Fixed-Income Funds | 10.4 |
High Yield Fixed-Income Funds | 1.1 |
Total Fixed-Income Central Funds | 11.5 |
Money Market Central Funds | 10.8 |
Other Short-Term Investments and Net Other Assets | 0.7 |
Total | 100.0 |
At period end, foreign investments including the Fund's pro-rata share of the underlying Central Funds was 26.9% of net assets.
A holdings list for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable.
Semiannual Report
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Central Funds - 77.0% | ||||
Shares | Value | |||
Fidelity Consumer Discretionary Central Fund (c) | 340,596 | $ 34,505,802 | ||
Fidelity Consumer Staples Central Fund (c) | 268,768 | 34,090,499 | ||
Fidelity Energy Central Fund (c) | 306,149 | 44,109,902 | ||
Fidelity Financials Central Fund (c) | 694,079 | 57,886,157 | ||
Fidelity Health Care Central Fund (c) | 388,606 | 39,793,203 | ||
Fidelity Industrials Central Fund (c) | 352,027 | 43,482,385 | ||
Fidelity Information Technology Central Fund (c) | 443,960 | 51,659,221 | ||
Fidelity International Equity Central Fund (c) | 819,300 | 69,869,904 | ||
Fidelity Materials Central Fund (c) | 101,546 | 14,330,145 | ||
Fidelity Telecom Services Central Fund (c) | 94,459 | 10,214,795 | ||
Fidelity Utilities Central Fund (c) | 117,180 | 13,488,630 | ||
TOTAL EQUITY CENTRAL FUNDS (Cost $407,729,742) | 413,430,643 | |||
Fixed-Income Central Funds - 11.5% | ||||
High Yield Fixed-Income Funds - 1.1% | ||||
Fidelity High Income Central Fund 1 (c) | 61,390 | 5,696,350 | ||
Investment Grade Fixed-Income Funds - 10.4% | ||||
Fidelity Tactical Income Central Fund (c) | 587,352 | 55,692,713 | ||
TOTAL FIXED-INCOME CENTRAL FUNDS (Cost $62,743,046) | 61,389,063 | |||
Money Market Central Funds - 10.8% | ||||
Fidelity Cash Central Fund, 2.69% (a) | 57,693,032 | 57,693,032 | ||
U.S. Treasury Obligations - 0.6% | ||||
Principal Amount | Value | |||
U.S. Treasury Bills, yield at date of purchase 1.4% to 2.14% 4/17/08 to 6/5/08 (b) | $ 3,400,000 | $ 3,393,058 | ||
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $531,556,132) | 535,905,796 | |||
NET OTHER ASSETS - 0.1% | 775,151 | |||
NET ASSETS - 100% | $ 536,680,947 | |||
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
46 Dow Jones Euro Stoxx 50 Index Contracts (Germany) | June 2008 | $ 2,577,128 | $ 129,118 | ||
22 FTSE 100 Index Contracts (United Kingdom) | June 2008 | 2,491,960 | (5,740) | ||
618 S&P 500 E-Mini Index Contracts | June 2008 | 40,911,600 | 963,105 | ||
22 TOPIX 150 Index Contracts (Japan) | June 2008 | 2,682,550 | 38,969 | ||
TOTAL EQUITY INDEX CONTRACTS | $ 48,663,238 | $ 1,125,452 | |||
The face value of futures purchased as a percentage of net assets - 9.1% |
Legend |
(a) Affiliated fund that is 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. |
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $2,993,979. |
(c) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,381,517 |
Fidelity Consumer Discretionary Central Fund | 279,530 |
Fidelity Consumer Staples Central Fund | 312,687 |
Fidelity Energy Central Fund | 163,442 |
Fidelity Financials Central Fund | 911,047 |
Fidelity Health Care Central Fund | 215,593 |
Fidelity High Income Central Fund 1 | 263,097 |
Fidelity Industrials Central Fund | 321,246 |
Fidelity Information Technology Central Fund | 200,529 |
Fidelity International Equity Central Fund | 408,570 |
Fidelity Materials Central Fund | 150,736 |
Fidelity Securities Lending Cash Central Fund | 4,304 |
Fidelity Tactical Income Central Fund | 1,698,343 |
Fidelity Telecom Services Central Fund | 116,762 |
Fidelity Utilities Central Fund | 150,739 |
Total | $ 6,578,142 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, | Purchases | Sales | Value, | % ownership, end of |
Fidelity Consumer Discretionary Central Fund | $ 38,476,813 | $ 2,790,302 | $ - | $ 34,505,802 | 5.7% |
Fidelity Consumer Staples Central Fund | 31,481,455 | 2,407,026 | - | 34,090,499 | 5.7% |
Fidelity Energy Central Fund | 39,903,408 | 3,250,126 | - | 44,109,902 | 5.7% |
Fidelity Financials Central Fund | 71,344,905 | 5,019,654 | - | 57,886,157 | 5.7% |
Fidelity Health Care Central Fund | 43,134,603 | 3,253,549 | - | 39,793,203 | 5.7% |
Fidelity High Income Central Fund 1 | 8,946,922 | - | 2,899,743 | 5,696,350 | 2.2% |
Fidelity Industrials Central Fund | 44,167,755 | 3,293,245 | - | 43,482,385 | 5.7% |
Fidelity Information Technology Central Fund | 61,814,912 | 4,417,004 | - | 51,659,221 | 5.7% |
Fidelity International Equity Central Fund | - | 81,378,936 | - | 69,869,904 | 9.2% |
Fidelity Materials Central Fund | 13,842,100 | 1,069,489 | - | 14,330,145 | 5.7% |
Fidelity Tactical Income Central Fund | 65,379,747 | 1,698,343 | 9,980,134 | 55,692,713 | 1.1% |
Fidelity Telecom Services Central Fund | 13,358,236 | 898,652 | - | 10,214,795 | 5.7% |
Fidelity Utilities Central Fund | 13,416,809 | 1,007,810 | - | 13,488,630 | 5.7% |
Total | $ 445,267,665 | $ 110,484,136 | $ 12,879,877 | $ 474,819,706 |
Other Information |
The information in the following tables is based on the combined investment of the Fund and its pro-rata share of the investments of Fidelity's Equity and Fixed-Income Central Funds. The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 6.4% |
AAA,AA,A | 3.1% |
BBB | 1.8% |
BB | 0.6% |
B | 0.4% |
CCC,CC,C | 0.1% |
Equities | 84.0% |
Short-Term Investments and Net Other Assets | 3.6% |
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows. Percentages are adjusted for the effect of futures contracts, if applicable. (Unaudited) |
United States of America | 73.1% |
United Kingdom | 3.8% |
Japan | 2.9% |
Germany | 2.5% |
France | 2.3% |
Switzerland | 2.1% |
Bermuda | 2.0% |
Cayman Islands | 1.3% |
Canada | 1.2% |
Others (individually less than 1%) | 8.8% |
100.0% |
Income Tax Information |
At September 30, 2007, the fund had a capital loss carryforward of approximately $41,699,489 all of which will expire on September 30, 2011. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $3,390,312) | $ 3,393,058 | |
Fidelity Central Funds (cost $528,165,820) | 532,512,738 | |
Total Investments (cost $531,556,132) | $ 535,905,796 | |
Foreign currency held at value (cost $256,544) | 272,636 | |
Receivable for fund shares sold | 1,244,782 | |
Dividends receivable | 32,290 | |
Interest receivable | 1 | |
Distributions receivable from Fidelity Central Funds | 426,472 | |
Receivable for daily variation on futures contracts | 63,770 | |
Prepaid expenses | 1,391 | |
Other receivables | 3,400 | |
Total assets | 537,950,538 | |
Liabilities | ||
Payable for investments purchased | $ 252,147 | |
Payable for fund shares redeemed | 571,088 | |
Accrued management fee | 246,836 | |
Transfer agent fee payable | 109,994 | |
Distribution fees payable | 9,163 | |
Other affiliated payables | 16,926 | |
Other payables and accrued expenses | 63,437 | |
Total liabilities | 1,269,591 | |
Net Assets | $ 536,680,947 | |
Net Assets consist of: | ||
Paid in capital | $ 604,975,458 | |
Undistributed net investment income | 2,232,610 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (76,014,866) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 5,487,745 | |
Net Assets | $ 536,680,947 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
March 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.72 | |
Maximum offering price per share (100/94.25 of $12.72) | $ 13.50 | |
Class T: | $ 12.70 | |
Maximum offering price per share (100/96.50 of $12.70) | $ 13.16 | |
Class B: | $ 12.66 | |
Class C: | $ 12.63 | |
Asset Manager 85%: | $ 12.77 | |
Institutional Class: | $ 12.77 | |
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.
Semiannual Report
Statement of Operations
Six months ended March 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 18,391 | |
Interest | 66,733 | |
Income from Fidelity Central Funds | 6,578,142 | |
Total income | 6,663,266 | |
Expenses | ||
Management fee | $ 1,581,606 | |
Transfer agent fees | 674,530 | |
Distribution fees | 48,758 | |
Accounting and security lending fees | 106,762 | |
Custodian fees and expenses | 15,295 | |
Independent trustees' compensation | 1,163 | |
Registration fees | 38,779 | |
Audit | 36,046 | |
Legal | 2,403 | |
Miscellaneous | 1,776 | |
Total expenses before reductions | 2,507,118 | |
Expense reductions | (51,931) | 2,455,187 |
Net investment income (loss) | 4,208,079 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $41,077) | (858,351) | |
Fidelity Central Funds | (145,858) | |
Foreign currency transactions | (92,211) | |
Futures contracts | (6,755,394) | |
Total net realized gain (loss) | (7,851,814) | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $20,675) | (69,457,342) | |
Assets and liabilities in foreign currencies | 18,519 | |
Futures contracts | (1,076,611) | |
Total change in net unrealized appreciation (depreciation) | (70,515,434) | |
Net gain (loss) | (78,367,248) | |
Net increase (decrease) in net assets resulting from operations | $ (74,159,169) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended March 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 4,208,079 | $ 8,364,040 |
Net realized gain (loss) | (7,851,814) | 16,447,618 |
Change in net unrealized appreciation (depreciation) | (70,515,434) | 57,830,856 |
Net increase (decrease) in net assets resulting | (74,159,169) | 82,642,514 |
Distributions to shareholders from net investment income | (9,363,481) | (7,445,590) |
Distributions to shareholders from net realized gain | (1,224,803) | (712,648) |
Total distributions | (10,588,284) | (8,158,238) |
Share transactions - net increase (decrease) | 30,756,659 | 67,356,167 |
Total increase (decrease) in net assets | (53,990,794) | 141,840,443 |
Net Assets | ||
Beginning of period | 590,671,741 | 448,831,298 |
End of period (including undistributed net investment income of $2,232,610 and undistributed net investment income of $7,388,012, respectively) | $ 536,680,947 | $ 590,671,741 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.77 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .08 | .19 |
Net realized and unrealized gain (loss) | (1.87) | 2.05 |
Total from investment operations | (1.79) | 2.24 |
Distributions from net investment income | (.23) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.26) | (.22) |
Net asset value, end of period | $ 12.72 | $ 14.77 |
Total Return B, C, D | (12.32)% | 17.78% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.12% A | 1.14% A |
Expenses net of fee waivers, if any | 1.12% A | 1.14% A |
Expenses net of all reductions | 1.10% A | 1.12% A |
Net investment income (loss) | 1.24% A | 1.36% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 11,219 | $ 7,348 |
Portfolio turnover rate F | 30% A | 31% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.74 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .07 | .15 |
Net realized and unrealized gain (loss) | (1.88) | 2.06 |
Total from investment operations | (1.81) | 2.21 |
Distributions from net investment income | (.20) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.23) | (.22) |
Net asset value, end of period | $ 12.70 | $ 14.74 |
Total Return B, C, D | (12.41)% | 17.46% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.38% A | 1.42% A |
Expenses net of fee waivers, if any | 1.38% A | 1.42% A |
Expenses net of all reductions | 1.37% A | 1.41% A |
Net investment income (loss) | .97% A | 1.07% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,691 | $ 1,792 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.69 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .03 | .08 |
Net realized and unrealized gain (loss) | (1.87) | 2.07 |
Total from investment operations | (1.84) | 2.15 |
Distributions from net investment income | (.16) | (.19) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.19) | (.21) |
Net asset value, end of period | $ 12.66 | $ 14.69 |
Total Return B, C, D | (12.65)% | 16.98% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.93% A | 1.93% A |
Expenses net of fee waivers, if any | 1.93% A | 1.93% A |
Expenses net of all reductions | 1.91% A | 1.92% A |
Net investment income (loss) | .43% A | .56% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,298 | $ 1,632 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.67 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) E | .03 | .08 |
Net realized and unrealized gain (loss) | (1.86) | 2.06 |
Total from investment operations | (1.83) | 2.14 |
Distributions from net investment income | (.18) | (.20) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.21) | (.22) |
Net asset value, end of period | $ 12.63 | $ 14.67 |
Total Return B, C, D | (12.65)% | 16.90% |
Ratios to Average Net Assets H | ||
Expenses before reductions | 1.89% A | 1.91% A |
Expenses net of fee waivers, if any | 1.89% A | 1.91% A |
Expenses net of all reductions | 1.88% A | 1.90% A |
Net investment income (loss) | .46% A | .58% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 4,802 | $ 3,194 |
Portfolio turnover rate F | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Asset Manager 85%
Six months ended March 31, 2008 | Years ended September 30, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 14.81 | $ 12.79 | $ 11.69 | $ 10.29 | $ 9.26 | $ 6.79 |
Income from Investment | ||||||
Net investment income (loss) D | .10 | .23 | .18 | .06 F | .05 | .05 |
Net realized and unrealized gain (loss) | (1.88) | 2.02 | .98 | 1.40 | 1.04 | 2.49 |
Total from investment operations | (1.78) | 2.25 | 1.16 | 1.46 | 1.09 | 2.54 |
Distributions from net investment income | (.23) | (.21) | (.06) | (.06) | (.06) | (.07) |
Distributions from net realized gain | (.03) | (.02) | - | - | - | - |
Total distributions | (.26) | (.23) | (.06) | (.06) | (.06) | (.07) |
Net asset value, end of period | $ 12.77 | $ 14.81 | $ 12.79 | $ 11.69 | $ 10.29 | $ 9.26 |
Total Return B, C | (12.19)% | 17.77% | 9.95% | 14.22% | 11.79% | 37.74% |
Ratios to Average Net Assets G | ||||||
Expenses before reductions | .86% A | .89% | .91% | .92% | .94% | 1.03% |
Expenses net of fee waivers, if any | .86% A | .87% | .91% | .92% | .94% | 1.03% |
Expenses net of all reductions | .84% A | .86% | .87% | .89% | .91% | 1.00% |
Net investment income (loss) | 1.50% A | 1.62% | 1.50% | .53% F | .52% | .63% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $ 515,388 | $ 576,458 | $ 448,831 | $ 403,221 | $ 352,600 | $ 250,354 |
Portfolio turnover rate E | 30% A | 31% | 187% H | 71% H | 86% | 131% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a special dividend which amounted to $.02 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 F | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 14.82 | $ 12.75 |
Income from Investment Operations | ||
Net investment income (loss) D | .11 | .23 |
Net realized and unrealized gain (loss) | (1.89) | 2.07 |
Total from investment operations | (1.78) | 2.30 |
Distributions from net investment income | (.24) | (.21) |
Distributions from net realized gain | (.03) | (.02) |
Total distributions | (.27) | (.23) |
Net asset value, end of period | $ 12.77 | $ 14.82 |
Total Return B, C | (12.18)% | 18.24% |
Ratios to Average Net Assets G | ||
Expenses before reductions | .80% A | .82% A |
Expenses net of fee waivers, if any | .80% A | .82% A |
Expenses net of all reductions | .78% A | .81% A |
Net investment income (loss) | 1.56% A | 1.67% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 283 | $ 247 |
Portfolio turnover rate E | 30% A | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F For the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
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 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. Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses ranged from less than .01% to .02%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Asset Manager 85% (the Fund) is a fund of Fidelity Charles 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 B, Class C, Asset Manager 85% and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities Foreign Securities Repurchase Agreements Restricted Securities Loans & Direct Debt Instruments | Less than .01% to .02% |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | Less than .01% |
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Foreign Securities Repurchase Agreements | .02% |
Fidelity Tactical Income Central Fund | Fidelity Investments Money Management, Inc. (FIMM) | Seeks a high level of income by normally investing in investment-grade debt securities. | Delayed Delivery & When Issued Securities Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements | Less than .01% |
Semiannual Report
2. Investments in Fidelity Central Funds - continued
Fidelity Central Fund | Investment | Investment | Investment | Expense |
Fidelity Money Market Central Funds | FIMM | Seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual
shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site 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, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
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 an independent pricing service on the primary market or exchange on which they are traded. 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. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds and monitoring current market trading activity, interest rates, credit quality and default rates for debt instruments. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Actual prices received at disposition may differ.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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.
Semiannual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value. Based on their most recent shareholder report date, expenses of the Fidelity Central Funds ranged from less than .01% to .02%.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are 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 generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), market discount, partnerships (including allocations from Fidelity Central Funds), capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 20,365,062 | |
Unrealized depreciation | (39,531,095) | |
Net unrealized appreciation (depreciation) | $ (19,166,033) | |
Cost for federal income tax purposes | $ 555,071,829 |
New Accounting Pronouncements. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts."
This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $114,413,805 and $75,609,143, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 11,813 | $ 1,430 |
Class T | .25% | .25% | 6,094 | 252 |
Class B | .75% | .25% | 9,886 | 7,542 |
Class C | .75% | .25% | 20,965 | 15,814 |
$ 48,758 | $ 25,038 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 18,926 |
Class T | 2,401 |
Class B* | 251 |
Class C* | 796 |
$ 22,374 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the sub-transfer agent for Asset Manager 85% shares. For the period, each class paid the following transfer agent fees:
Amount | % of | |
Class A | $ 11,382 | .24 |
Class T | 3,090 | .25 |
Class B | 2,917 | .30 |
Class C | 5,397 | .26 |
Asset Manager 85% | 651,529 | .24 |
Institutional Class | 215 | .17 |
$ 674,530 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the 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. The commissions paid to these affiliated firms were $66 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $715 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day.
If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $4,304.
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of Asset Manager 85% operating expenses. During the period, this reimbursement reduced the Class' expenses by $9,680.
Many of the brokers with whom FMR places trades on behalf of the Fund and certain Equity Central Funds provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $34,410 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $228.
Semiannual Report
9. Expense Reductions - continued
During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | ||
Class A | $ 192 | |
Asset Manager 85% | 7,419 | |
Institutional Class | 2 | |
$ 7,613 |
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $59,143, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 150,986 | $ 3,111 |
Class T | 34,666 | 3,070 |
Class B | 23,020 | 2,303 |
Class C | 54,595 | 5,563 |
Asset Manager 85% | 9,096,274 | 7,429,888 |
Institutional Class | 3,940 | 1,655 |
Total | $ 9,363,481 | $ 7,445,590 |
From net realized gain | ||
Class A | $ 20,022 | $ 362 |
Class T | 5,093 | 315 |
Class B | 4,288 | 249 |
Class C | 9,298 | 571 |
Asset Manager 85% | 1,185,614 | 710,994 |
Institutional Class | 488 | 157 |
Total | $ 1,224,803 | $ 712,648 |
A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class A | ||||
Shares sold | 439,896 | 533,617 | $ 6,066,195 | $ 7,482,672 |
Reinvestment of distributions | 11,613 | 259 | 164,450 | 3,472 |
Shares redeemed | (67,235) | (36,450) | (927,772) | (505,258) |
Net increase (decrease) | 384,274 | 497,426 | $ 5,302,873 | $ 6,980,886 |
Class T | ||||
Shares sold | 115,381 | 132,362 | $ 1,608,085 | $ 1,878,689 |
Reinvestment of distributions | 2,802 | 252 | 39,626 | 3,385 |
Shares redeemed | (27,889) | (11,048) | (368,614) | (158,492) |
Net increase (decrease) | 90,294 | 121,566 | $ 1,279,097 | $ 1,723,582 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended March 31, | Year ended | Six months ended March 31, | Year ended | |
Class B | ||||
Shares sold | 81,605 | 113,822 | $ 1,117,865 | $ 1,577,374 |
Reinvestment of distributions | 1,841 | 179 | 26,000 | 2,400 |
Shares redeemed | (13,072) | (2,876) | (179,022) | (40,678) |
Net increase (decrease) | 70,374 | 111,125 | $ 964,843 | $ 1,539,096 |
Class C | ||||
Shares sold | 181,906 | 228,834 | $ 2,522,653 | $ 3,208,263 |
Reinvestment of distributions | 3,034 | 447 | 42,720 | 5,995 |
Shares redeemed | (22,405) | (11,500) | (296,002) | (161,700) |
Net increase (decrease) | 162,535 | 217,781 | $ 2,269,371 | $ 3,052,558 |
Asset Manager 85% | ||||
Shares sold | 6,644,681 | 11,993,958 | $ 92,663,890 | $ 166,840,157 |
Reinvestment of distributions | 709,187 | 595,752 | 10,063,914 | 7,989,027 |
Shares redeemed | (5,913,286) | (8,742,465) | (81,857,348) | (120,993,870) |
Net increase (decrease) | 1,440,582 | 3,847,245 | $ 20,870,456 | $ 53,835,314 |
Institutional Class | ||||
Shares sold | 6,596 | 16,534 | $ 86,489 | $ 222,919 |
Reinvestment of distributions | 180 | 135 | 2,553 | 1,812 |
Shares redeemed | (1,277) | - | (19,023) | - |
Net increase (decrease) | 5,499 | 16,669 | $ 70,019 | $ 224,731 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period October 2, 2006 (commencement of sale of shares) to September 30, 2007.
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investment Money Management, Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis
Company
Fidelity International
Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AAM85I-USAN-0508
1.834346.101
(Fidelity Investment logo)(registered trademark)
Fidelity®
Broad Market Opportunities
Fund
Semiannual Report
March 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
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 (search for "proxy voting guidelines") 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.
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 or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Continuation of a credit squeeze, flat consumer spending and a potential recession weighed heavily on stocks in the opening months of 2008, though positive results in investment-grade bonds and money markets offered some comfort to investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
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 (October 1, 2007 to March 31, 2008).
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.
Semiannual Report
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.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 861.90 | $ 4.65 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.00 | $ 5.05 |
* Expenses are equal to the Fund's annualized expense ratio of 1.00%; multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.
Semiannual Report
Fidelity Broad Market Opportunities Fund
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the Investments of Fidelity's Equity Central Funds.
Top Ten Stocks as of March 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cisco Systems, Inc. | 1.6 | 1.3 |
Procter & Gamble Co. | 1.6 | 1.4 |
Nintendo Co. Ltd. | 1.2 | 0.2 |
General Electric Co. | 1.2 | 1.3 |
JPMorgan Chase & Co. | 1.1 | 1.0 |
American International Group, Inc. | 1.1 | 1.1 |
The Coca-Cola Co. | 1.0 | 0.8 |
CVS Caremark Corp. | 0.9 | 0.6 |
Bank of America Corp. | 0.8 | 1.0 |
PepsiCo, Inc. | 0.8 | 0.7 |
11.3 | ||
Asset Allocation (% of fund's net assets) | |||||||
As of March 31, 2008 | As of September 30, 2007 | ||||||
| Stocks 96.8% | | Stocks 99.0% | ||||
| Convertible | | Convertible | ||||
| Short-Term | | Short-Term | ||||
Semiannual Report
The information in the following table is based on the direct investments of the Fund.
Fund Holdings as of March 31, 2008 | |
% of fund's | |
Equity Holdings | |
Equity Sector Central Funds | |
Fidelity Financials Central Fund | 17.1 |
Fidelity Information Technology Central Fund | 15.3 |
Fidelity Energy Central Fund | 12.6 |
Fidelity Industrials Central Fund | 12.6 |
Fidelity Health Care Central Fund | 11.6 |
Fidelity Consumer Discretionary Central Fund | 9.9 |
Fidelity Consumer Staples Central Fund | 9.8 |
Fidelity Materials Central Fund | 4.1 |
Fidelity Utilities Central Fund | 3.9 |
Fidelity Telecom Services Central Fund | 3.1 |
Total Equity Sector Central Funds | 100.0 |
Net Other Assets | 0.0 |
Total | 100.0 |
At period end, investments in foreign securities, including the Fund's pro-rata share of the underlying Central Funds, was 17.9% of net assets.
A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com.
Semiannual Report
Fidelity Broad Market Opportunities Fund
Investments March 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Equity Sector Central Funds - 100.0% | |||
Shares | Value | ||
Fidelity Consumer Discretionary Central Fund (a) | 3,613 | $ 366,013 | |
Fidelity Consumer Staples Central Fund (a) | 2,866 | 363,539 | |
Fidelity Energy Central Fund (a) | 3,238 | 466,545 | |
Fidelity Financials Central Fund (a) | 7,581 | 632,263 | |
Fidelity Health Care Central Fund (a) | 4,215 | 431,599 | |
Fidelity Industrials Central Fund (a) | 3,792 | 468,433 | |
Fidelity Information Technology Central Fund (a) | 4,877 | 567,526 | |
Fidelity Materials Central Fund (a) | 1,081 | 152,588 | |
Fidelity Telecom Services Central Fund (a) | 1,057 | 114,254 | |
Fidelity Utilities Central Fund (a) | 1,258 | 144,788 | |
TOTAL EQUITY SECTOR CENTRAL FUNDS (Cost $4,032,030) | 3,707,548 | ||
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $4,032,030) | 3,707,548 | ||
NET OTHER ASSETS - 0.0% | (1,709) | ||
NET ASSETS - 100% | $ 3,705,839 | ||
Legend |
(a) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request. |
Income Tax Information |
At September 30, 2007, the fund had a capital loss carryforward of approximately $8,828 all of which will expire on September 30, 2015. |
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 Consumer Discretionary Central Fund | $ 2,323 |
Fidelity Consumer Staples Central Fund | 2,623 |
Fidelity Energy Central Fund | 1,303 |
Fidelity Financials Central Fund | 7,332 |
Fidelity Health Care Central Fund | 1,824 |
Fidelity Industrials Central Fund | 2,686 |
Fidelity Information Technology Central Fund | 1,762 |
Fidelity Materials Central Fund | 1,173 |
Fidelity Telecom Services Central Fund | 825 |
Fidelity Utilities Central Fund | 1,156 |
Total | $ 23,007 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value, beginning of period | Purchases | Sales Proceeds | Value, | % ownership, end of |
Fidelity Consumer Discretionary | $ 168,805 | $ 269,808 | $ 22,661 | $ 366,013 | 0.1% |
Fidelity Consumer | 136,035 | 246,018 | 18,793 | 363,539 | 0.1% |
Fidelity Energy | 177,175 | 308,467 | 23,550 | 466,545 | 0.1% |
Fidelity Financials | 316,921 | 498,854 | 41,520 | 632,263 | 0.1% |
Fidelity Health Care Central Fund | 188,141 | 337,667 | 25,667 | 431,599 | 0.1% |
Fidelity Industrials | 190,929 | 329,841 | 25,421 | 468,433 | 0.1% |
Fidelity Information Technology Central Fund | 270,327 | 446,811 | 33,945 | 567,526 | 0.1% |
Fidelity Materials | 60,010 | 104,075 | 7,984 | 152,588 | 0.1% |
Fidelity Telecom Services Central Fund | 57,080 | 94,759 | 7,151 | 114,254 | 0.1% |
Fidelity Utilities | 58,139 | 107,071 | 8,118 | 144,788 | 0.1% |
Total | $ 1,623,562 | $ 2,743,371 | $ 214,810 | $ 3,707,548 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
March 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (cost $4,032,030) - See accompanying schedule | $ 3,707,548 | |
Cash | 12,000 | |
Receivable for investments sold | 7,252 | |
Receivable for fund shares sold | 4,285 | |
Receivable from investment adviser for expense reductions | 3,127 | |
Total assets | 3,734,212 | |
Liabilities | ||
Payable for fund shares redeemed | $ 9,793 | |
Accrued management fee | 1,681 | |
Other affiliated payables | 502 | |
Other payables and accrued expenses | 16,397 | |
Total liabilities | 28,373 | |
Net Assets | $ 3,705,839 | |
Net Assets consist of: | ||
Paid in capital | $ 4,035,886 | |
Undistributed net investment income | 1,815 | |
Accumulated undistributed net realized gain (loss) on investments | (7,380) | |
Net unrealized appreciation (depreciation) on investments | (324,482) | |
Net Assets, for 401,715 shares outstanding | $ 3,705,839 | |
Net Asset Value, offering price and redemption price per share ($3,705,839 ÷ 401,715 shares) | $ 9.23 | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended March 31, 2008 (Unaudited) | ||
Investment Income | ||
Interest | $ 4 | |
Income from Fidelity Central Funds | 23,007 | |
Total income | 23,011 | |
Expenses | ||
Management fee | $ 7,683 | |
Transfer agent fees | 2,127 | |
Accounting fees and expenses | 537 | |
Custodian fees and expenses | 15,326 | |
Independent trustees' compensation | 5 | |
Audit | 11,877 | |
Miscellaneous | 3 | |
Total expenses before reductions | 37,558 | |
Expense reductions | (23,991) | 13,567 |
Net investment income (loss) | 9,444 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Fidelity Central Funds | (9,606) | |
Change in net unrealized appreciation (depreciation) on investment securities | (427,454) | |
Net gain (loss) | (437,060) | |
Net increase (decrease) in net assets resulting from operations | $ (427,616) | |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended March 31, 2008 (Unaudited) | For the period | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 9,444 | $ 1,777 |
Net realized gain (loss) | (9,606) | 73 |
Change in net unrealized appreciation | (427,454) | 102,972 |
Net increase (decrease) in net assets resulting | (427,616) | 104,822 |
Distributions to shareholders from net investment income | (7,629) | - |
Share transactions | 2,792,760 | 1,513,309 |
Reinvestment of distributions | 7,629 | - |
Cost of shares redeemed | (277,083) | (353) |
Net increase (decrease) in net assets resulting from share transactions | 2,523,306 | 1,512,956 |
Total increase (decrease) in net assets | 2,088,061 | 1,617,778 |
Net Assets | ||
Beginning of period | 1,617,778 | - |
End of period (including undistributed net investment income of $1,815 and $0, respectively.) | $ 3,705,839 | $ 1,617,778 |
Other Information Shares | ||
Sold | 278,322 | 150,711 |
Issued in reinvestment of distributions | 728 | - |
Redeemed | (28,011) | (35) |
Net increase (decrease) | 251,039 | 150,676 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended March 31, 2008 | Year ended | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 10.74 | $ 10.00 |
Income from Investment Operations | ||
Net investment income (loss) D | .03 | .01 |
Net realized and unrealized gain (loss) | (1.51) | .73 |
Total from investment operations | (1.48) | .74 |
Distributions from net investment income | (.03) | - |
Net asset value, end of period | $ 9.23 | $ 10.74 |
Total Return B,C | (13.81)% | 7.40% |
Ratios to Average Net Assets E,H | ||
Expenses before reductions | 2.75% A | 11.66% A |
Expenses net of fee waivers, if any | 1.00% A | 1.00% A |
Expenses net of all reductions | .99% A | 1.00% A |
Net investment income (loss) | .69% A | 1.10% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,706 | $ 1,618 |
Portfolio turnover rate F | 15% A | 4% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are 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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period August 21, 2007 (commencement of operations) to September 30, 2007.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended March 31, 2008 (Unaudited)
1. Organization.
Fidelity Broad Market Opportunities Fund (the Fund) is a fund of Fidelity Charles Street Trust (the trust) and is authorized to issue an unlimited number of shares. Shares of the Fund are only offered to other investment companies and accounts (the Investing Funds) managed by Fidelity Management & Research Company (FMR), or its affiliates. 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 may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by FMR and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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.
Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in the Fidelity Central Funds.
Fidelity | Investment | Investment | Investment |
Fidelity Equity Sector Central Funds | Fidelity Management & Research Company, Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Foreign Securities Repurchase Agreements Restricted |
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at
fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site, or upon request.
Semiannual Report
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Net asset value per share is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Investments in the Fidelity Central Funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost, which approximates value.
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 for processing shareholder transactions 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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's net asset value.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to partnerships (including allocations from Fidelity Central Funds) and capital loss carryforwards.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 53,819 |
Unrealized depreciation | (378,301) |
Net unrealized appreciation (depreciation) | $ (324,482) |
Cost for federal income tax purposes | $ 4,032,030 |
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
4. Operating Policies.
Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
5. Purchases and Sales of Investments.
Purchases and sales of securities including the Fidelity Central Funds, other than short-term securities and U.S. government securities, aggregated $2,735,860 and $214,814, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
FMR pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .16% of average net assets.
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
FMR voluntarily agreed to reimburse the Fund to the extent annual operating expenses exceeded 1.00% of average net assets. Some expenses, for example interest expense,
Semiannual Report
Notes to Financial Statements - continued
8. Expense Reductions - continued
including commitment fees, are excluded from this reimbursement. During the period this reimbursement reduced the Fund's expenses by $23,922. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $69.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period mutual funds managed by FMR or an FMR affiliate were the owners of record of all of the outstanding shares of the Fund.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
Arizona
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15445 N. Scottsdale Road
Scottsdale, AZ
California
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Brea, CA
1411 Chapin Avenue
Burlingame, CA
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111 South Westlake Blvd
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6326 Canoga Avenue
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Colorado
281 East Flatiron Circle
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9185 Westview Road
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Connecticut
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Delaware
400 Delaware Avenue
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Florida
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4400 N. Federal Highway
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2948 N. Federal Highway
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4671 Town Center Parkway
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230 Royal Palm Way
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1502 N. Westshore Blvd.
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2465 State Road 7
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Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
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Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
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Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
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Indiana
4729 East 82nd Street
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8480 Keystone Crossing
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Kansas
5400 College Boulevard
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Maine
Three Canal Plaza
Portland, ME
Maryland
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610 York Road
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Massachusetts
801 Boylston Street
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155 Congress Street
Boston, MA
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44 Mall Road
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238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
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Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
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North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
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1800 Crocker Road
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28699 Chagrin Boulevard
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Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
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Rhode Island
10 Memorial Boulevard
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Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
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2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
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Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
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For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
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Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment Advisors
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Mellon Bank, N.A.
Pittsburgh, PA
BMO-SANN-0508
1.848240.100
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Charles Street 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 Fidelity Charles Street Trust's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the 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) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Charles Street Trust
By: | /s/Kimberley Monasterio |
Kimberley Monasterio | |
President and Treasurer | |
Date: | May 30, 2008 |
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/Kimberley Monasterio |
Kimberley Monasterio | |
President and Treasurer | |
Date: | May 30, 2008 |
By: | /s/Joseph B. Hollis |
Joseph B. Hollis | |
Chief Financial Officer | |
Date: | May 30, 2008 |