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 811-3587
Fidelity Financial Trust
(Exact name of registrant as specified in charter)
245 Summer Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Scott C. Goebel, Secretary
245 Summer Street
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | November 30 |
|
|
Date of reporting period: | May 31, 2015 |
Item 1. Reports to Stockholders
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®
Convertible Securities
Fund - Institutional Class
(To be renamed Class I effective July 1, 2015)
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Institutional Class is a class
of Fidelity® Convertible
Securities Fund
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Shareholder Expense Example - continued
| Annualized Expense RatioB | Beginning | Ending | Expenses Paid |
Class A | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,007.20 | $ 4.35 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.59 | $ 4.38 |
Class T | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,005.40 | $ 5.75 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.20 | $ 5.79 |
Class B | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,002.90 | $ 8.24 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.70 | $ 8.30 |
Class C | 1.63% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,003.20 | $ 8.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.80 | $ 8.20 |
Convertible Securities | .59% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,008.20 | $ 2.95 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.99 | $ 2.97 |
Institutional Class | .61% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,008.20 | $ 3.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.89 | $ 3.07 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Investments as of May 31, 2015 | ||
(excluding cash equivalents) | % of fund's | % of fund's net assets |
Wells Fargo & Co. 7.50% | 6.6 | 6.3 |
Level 3 Communications, Inc. | 4.8 | 2.0 |
Ford Motor Co. | 4.6 | 4.5 |
Actavis PLC 5.50% | 4.5 | 0.0 |
General Motors Co. | 4.2 | 3.7 |
United Continental Holdings, Inc. | 3.7 | 2.0 |
MGM Mirage, Inc. | 3.5 | 0.0 |
Bank of America Corp. Series L, 7.25% | 3.4 | 3.3 |
Citigroup, Inc. | 3.3 | 3.1 |
Novellus Systems, Inc. 2.625% 5/15/41 | 1.9 | 1.8 |
| 40.5 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Consumer Discretionary | 16.4 | 15.7 |
Financials | 16.3 | 15.5 |
Information Technology | 15.8 | 13.7 |
Health Care | 15.2 | 12.8 |
Industrials | 9.8 | 11.7 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015 * | As of November 30, 2014 ** | ||||||
Convertible |
| Convertible |
| ||||
Stocks 34.3% |
| Stocks 24.2% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 5.1% |
| ** Foreign investments | 3.5% |
|
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Convertible Bonds - 34.1% | ||||
| Principal Amount (000s) | Value (000s) | ||
CONSUMER DISCRETIONARY - 2.0% | ||||
Diversified Consumer Services - 0.2% | ||||
Carriage Services, Inc. 2.75% 3/15/21 | $ 3,160 | $ 3,895 | ||
Household Durables - 1.8% | ||||
K. Hovnanian Enterprises, Inc. 6% 12/1/17 | 4,695 | 4,968 | ||
Lennar Corp. 3.25% 11/15/21 (e) | 20,630 | 41,441 | ||
| 46,409 | |||
TOTAL CONSUMER DISCRETIONARY | 50,304 | |||
ENERGY - 6.4% | ||||
Energy Equipment & Services - 0.8% | ||||
SEACOR Holdings, Inc. 3% 11/15/28 | 7,000 | 6,300 | ||
Vantage Drilling Co. 5.5% 7/15/43 (e) | 20,000 | 12,488 | ||
| 18,788 | |||
Oil, Gas & Consumable Fuels - 5.6% | ||||
Chesapeake Energy Corp. 2.5% 5/15/37 | 10,545 | 10,215 | ||
Clean Energy Fuels Corp. 5.25% 10/1/18 (e) | 10,000 | 7,931 | ||
Cobalt International Energy, Inc. 2.625% 12/1/19 | 55,920 | 43,443 | ||
Peabody Energy Corp. 4.75% 12/15/41 | 103,850 | 26,027 | ||
Scorpio Tankers, Inc. 2.375% 7/1/19 (e) | 25,710 | 27,012 | ||
Whiting Petroleum Corp. 1.25% 4/1/20 (e) | 25,000 | 27,375 | ||
| 142,003 | |||
TOTAL ENERGY | 160,791 | |||
FINANCIALS - 1.0% | ||||
Insurance - 0.8% | ||||
FNF Group 4.25% 8/15/18 | 10,000 | 20,725 | ||
Thrifts & Mortgage Finance - 0.2% | ||||
MGIC Investment Corp. 2% 4/1/20 | 2,000 | 3,248 | ||
TOTAL FINANCIALS | 23,973 | |||
HEALTH CARE - 7.1% | ||||
Biotechnology - 0.7% | ||||
Orexigen Therapeutics, Inc. 2.75% 12/1/20 | 10,000 | 9,356 | ||
Spectrum Pharmaceuticals, Inc. 2.75% 12/15/18 | 10,000 | 9,188 | ||
| 18,544 | |||
Convertible Bonds - continued | ||||
| Principal Amount (000s) | Value (000s) | ||
HEALTH CARE - continued | ||||
Health Care Equipment & Supplies - 2.7% | ||||
Alere, Inc. 3% 5/15/16 | $ 31,000 | $ 37,975 | ||
Hologic, Inc. 2% 3/1/42 (d) | 22,716 | 29,076 | ||
| 67,051 | |||
Health Care Providers & Services - 1.2% | ||||
Molina Healthcare, Inc. 1.125% 1/15/20 | 15,000 | 27,356 | ||
Omnicare, Inc. 3.25% 12/15/35 | 2,086 | 2,588 | ||
| 29,944 | |||
Pharmaceuticals - 2.5% | ||||
Akorn, Inc. 3.5% 6/1/16 | 5,000 | 26,138 | ||
Horizon Pharma Investment Ltd. 2.5% 3/15/22 (e) | 10,000 | 13,600 | ||
Isis Pharmaceuticals, Inc. 2.75% 10/1/19 | 6,000 | 24,364 | ||
| 64,102 | |||
TOTAL HEALTH CARE | 179,641 | |||
INDUSTRIALS - 3.4% | ||||
Electrical Equipment - 0.5% | ||||
General Cable Corp. 4.5% 11/15/29 (d) | 14,800 | 11,942 | ||
Machinery - 2.9% | ||||
Greenbrier Companies, Inc.: | ||||
2.375% 5/15/26 (e) | 5,500 | 6,894 | ||
2.375% 5/15/26 | 8,000 | 10,028 | ||
3.5% 4/1/18 | 12,860 | 20,584 | ||
Terex Corp. 4% 6/15/15 | 9,590 | 15,817 | ||
Trinity Industries, Inc. 3.875% 6/1/36 | 15,000 | 20,681 | ||
| 74,004 | |||
TOTAL INDUSTRIALS | 85,946 | |||
INFORMATION TECHNOLOGY - 13.9% | ||||
Communications Equipment - 1.0% | ||||
Brocade Communications Systems, Inc. 1.375% 1/1/20 (e) | 8,710 | 9,238 | ||
InterDigital, Inc. 1.5% 3/1/20 (e) | 5,650 | 5,954 | ||
JDS Uniphase Corp. 0.625% 8/15/33 | 10,000 | 10,213 | ||
| 25,405 | |||
Convertible Bonds - continued | ||||
| Principal Amount (000s) | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | ||||
Electronic Equipment & Components - 0.5% | ||||
Vishay Intertechnology, Inc.: | ||||
2.25% 11/15/40 | $ 7,000 | $ 7,175 | ||
2.25% 5/15/41 | 7,000 | 5,740 | ||
| 12,915 | |||
Internet Software & Services - 4.1% | ||||
Monster Worldwide, Inc. 3.5% 10/15/19 (e) | 10,000 | 13,318 | ||
Twitter, Inc. 1% 9/15/21 (e) | 30,000 | 27,075 | ||
VeriSign, Inc. 4.136% 8/15/37 (d) | 15,000 | 28,294 | ||
Web.com Group, Inc. 1% 8/15/18 | 5,000 | 4,916 | ||
WebMD Health Corp.: | ||||
2.25% 3/31/16 | 10,000 | 10,050 | ||
2.5% 1/31/18 | 20,000 | 20,538 | ||
| 104,191 | |||
Semiconductors & Semiconductor Equipment - 7.0% | ||||
GT Advanced Technologies, Inc.: | ||||
3% 10/1/17 (c) | 10,000 | 2,850 | ||
3% 12/15/20 (c) | 23,000 | 6,555 | ||
Microchip Technology, Inc. 1.625% 2/15/25 (e) | 35,000 | 36,422 | ||
Micron Technology, Inc. 3.125% 5/1/32 | 12,090 | 34,865 | ||
Novellus Systems, Inc. 2.625% 5/15/41 | 20,000 | 48,013 | ||
ON Semiconductor Corp. 2.625% 12/15/26 | 29,512 | 39,897 | ||
Rambus, Inc. 1.125% 8/15/18 | 5,500 | 7,580 | ||
| 176,182 | |||
Software - 1.3% | ||||
Nuance Communications, Inc. 2.75% 11/1/31 | 32,000 | 32,080 | ||
TOTAL INFORMATION TECHNOLOGY | 350,773 | |||
MATERIALS - 0.3% | ||||
Chemicals - 0.1% | ||||
RPM International, Inc. 2.25% 12/15/20 | 1,950 | 2,279 | ||
Metals & Mining - 0.2% | ||||
Horsehead Holding Corp. 3.8% 7/1/17 | 5,000 | 5,264 | ||
TOTAL MATERIALS | 7,543 | |||
TOTAL CONVERTIBLE BONDS (Cost $771,793) |
|
Common Stocks - 34.3% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 14.4% | |||
Automobiles - 8.8% | |||
Ford Motor Co. | 7,701,262 | $ 116,828 | |
General Motors Co. | 2,926,368 | 105,261 | |
| 222,089 | ||
Diversified Consumer Services - 0.0% | |||
Houghton Mifflin Harcourt Co. warrants 6/22/19 (a)(f) | 686 | 12 | |
Hotels, Restaurants & Leisure - 3.5% | |||
MGM Mirage, Inc. (a) | 4,430,266 | 88,827 | |
Media - 2.1% | |||
Interpublic Group of Companies, Inc. | 778,966 | 15,906 | |
Liberty Global PLC: | |||
Class A (a) | 110,641 | 6,365 | |
Class C (a) | 275,873 | 14,828 | |
Sirius XM Holdings, Inc. (a) | 4,073,529 | 15,724 | |
| 52,823 | ||
TOTAL CONSUMER DISCRETIONARY | 363,751 | ||
ENERGY - 1.3% | |||
Oil, Gas & Consumable Fuels - 1.3% | |||
Western Refining, Inc. | 772,344 | 33,968 | |
FINANCIALS - 4.1% | |||
Banks - 3.3% | |||
Citigroup, Inc. | 1,545,034 | 83,555 | |
Insurance - 0.8% | |||
MetLife, Inc. | 369,100 | 19,289 | |
TOTAL FINANCIALS | 102,844 | ||
HEALTH CARE - 2.1% | |||
Health Care Providers & Services - 2.1% | |||
Omnicare, Inc. | 100,506 | 9,577 | |
Tenet Healthcare Corp. (a) | 821,302 | 43,685 | |
| 53,262 | ||
INDUSTRIALS - 5.7% | |||
Aerospace & Defense - 0.5% | |||
Textron, Inc. | 267,361 | 12,090 | |
Airlines - 3.7% | |||
United Continental Holdings, Inc. (a) | 1,689,010 | 92,203 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - continued | |||
Building Products - 0.1% | |||
Allegion PlC | 57,913 | $ 3,616 | |
Machinery - 0.5% | |||
Ingersoll-Rand PLC | 173,739 | 11,950 | |
Road & Rail - 0.9% | |||
Hertz Global Holdings, Inc. (a) | 1,206,637 | 24,000 | |
TOTAL INDUSTRIALS | 143,859 | ||
INFORMATION TECHNOLOGY - 1.9% | |||
Electronic Equipment & Components - 0.4% | |||
Viasystems Group, Inc. (a) | 549,643 | 10,042 | |
Semiconductors & Semiconductor Equipment - 0.8% | |||
ON Semiconductor Corp. (a) | 1,435,900 | 19,040 | |
Technology Hardware, Storage & Peripherals - 0.7% | |||
EMC Corp. | 574,571 | 15,134 | |
NetApp, Inc. | 76,367 | 2,551 | |
| 17,685 | ||
TOTAL INFORMATION TECHNOLOGY | 46,767 | ||
TELECOMMUNICATION SERVICES - 4.8% | |||
Diversified Telecommunication Services - 4.8% | |||
Level 3 Communications, Inc. (a) | 2,181,015 | 121,003 | |
TOTAL COMMON STOCKS (Cost $613,404) |
| ||
Convertible Preferred Stocks - 26.3% | |||
|
|
|
|
CONSUMER STAPLES - 3.4% | |||
Food Products - 3.4% | |||
Bunge Ltd. 4.875% (a) | 237,000 | 26,470 | |
Post Holdings, Inc.: | |||
3.75% (a)(e) | 100,000 | 10,053 | |
Series C, 2.50% (a)(e) | 100,000 | 8,700 | |
Tyson Foods, Inc. 4.75% (a) | 800,000 | 41,576 | |
| 86,799 | ||
Convertible Preferred Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - 1.6% | |||
Oil, Gas & Consumable Fuels - 1.6% | |||
Chesapeake Energy Corp. Series A, 5.75% (e) | 50,700 | $ 41,447 | |
FINANCIALS - 11.2% | |||
Banks - 10.1% | |||
Bank of America Corp. Series L, 7.25% | 74,135 | 84,922 | |
Huntington Bancshares, Inc. 8.50% (a) | 2,100 | 2,825 | |
Wells Fargo & Co. 7.50% | 137,632 | 166,369 | |
| 254,116 | ||
Real Estate Investment Trusts - 1.1% | |||
American Tower Corp. Series A, 5.25% (a) | 50,100 | 5,153 | |
Crown Castle International Corp. 4.50% | 72,900 | 7,498 | |
Weyerhaeuser Co. Series A, 6.375% | 271,200 | 14,704 | |
| 27,355 | ||
TOTAL FINANCIALS | 281,471 | ||
HEALTH CARE - 6.0% | |||
Health Care Providers & Services - 1.5% | |||
Anthem, Inc. 5.25% (a) | 712,000 | 38,035 | |
Pharmaceuticals - 4.5% | |||
Actavis PLC 5.50% | 105,500 | 111,827 | |
TOTAL HEALTH CARE | 149,862 | ||
INDUSTRIALS - 0.7% | |||
Aerospace & Defense - 0.1% | |||
United Technologies Corp. 7.50% | 45,700 | 2,784 | |
Road & Rail - 0.6% | |||
Genesee & Wyoming, Inc. 5.00% (a) | 137,000 | 14,545 | |
TOTAL INDUSTRIALS | 17,329 | ||
MATERIALS - 1.1% | |||
Metals & Mining - 1.1% | |||
Alcoa, Inc. Series 1, 5.375% (a) | 400,000 | 17,536 | |
ArcelorMittal SA 6.00% (a) | 568,500 | 9,842 | |
| 27,378 | ||
TELECOMMUNICATION SERVICES - 1.1% | |||
Wireless Telecommunication Services - 1.1% | |||
T-Mobile U.S., Inc. Series A 5.50% (a) | 397,500 | 27,336 | |
Convertible Preferred Stocks - continued | |||
Shares | Value (000s) | ||
UTILITIES - 1.2% | |||
Electric Utilities - 0.3% | |||
Exelon Corp. 6.50% | 171,500 | $ 8,285 | |
Independent Power and Renewable Electricity Producers - 0.9% | |||
Dynegy, Inc. 5.375% (a) | 200,000 | 22,396 | |
TOTAL UTILITIES | 30,681 | ||
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $629,973) |
| ||
Money Market Funds - 4.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.15% (b) | 123,247,589 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $2,138,418) | 2,509,976 | ||
NET OTHER ASSETS (LIABILITIES) - 0.4% | 10,549 | ||
NET ASSETS - 100% | $ 2,520,525 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(c) Non-income producing - Security is in default. |
(d) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $288,948,000 or 11.5% of net assets. |
(f) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $12,000 or 0.0% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Houghton Mifflin Harcourt Co. warrants 6/22/19 | 6/22/12 | $ 1 |
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 | $ 160 |
Fidelity Securities Lending Cash Central Fund | 0* |
Total | $ 160 |
* Amount represents one hundred and twenty nine dollars. |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 363,751 | $ 363,739 | $ 12 | $ - |
Consumer Staples | 86,799 | 41,576 | 45,223 | - |
Energy | 75,415 | 33,968 | 41,447 | - |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Financials | $ 384,315 | $ 369,611 | $ 14,704 | $ - |
Health Care | 203,124 | 165,089 | 38,035 | - |
Industrials | 161,188 | 146,643 | 14,545 | - |
Information Technology | 46,767 | 46,767 | - | - |
Materials | 27,378 | 17,536 | 9,842 | - |
Telecommunication Services | 148,339 | 148,339 | - | - |
Utilities | 30,681 | 30,681 | - | - |
Corporate Bonds | 858,971 | - | 858,971 | - |
Money Market Funds | 123,248 | 123,248 | - | - |
Total Investments in Securities: | $ 2,509,976 | $ 1,487,197 | $ 1,022,779 | $ - |
The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited): |
BBB | 2.8% |
BB | 11.9% |
B | 2.1% |
CCC,CC,C | 5.4% |
Not Rated | 11.9% |
Equities | 60.6% |
Short-Term Investments and Net Other Assets | 5.3% |
| 100.0% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. |
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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $2,015,170) | $ 2,386,728 |
|
Fidelity Central Funds (cost $123,248) | 123,248 |
|
Total Investments (cost $2,138,418) |
| $ 2,509,976 |
Receivable for fund shares sold | 1,157 | |
Dividends receivable | 6,112 | |
Interest receivable | 6,799 | |
Distributions receivable from Fidelity Central Funds | 21 | |
Prepaid expenses | 1 | |
Other receivables | 6 | |
Total assets | 2,524,072 | |
|
|
|
Liabilities | ||
Payable for fund shares redeemed | $ 2,323 | |
Accrued management fee | 694 | |
Transfer agent fee payable | 348 | |
Distribution and service plan fees payable | 68 | |
Other affiliated payables | 65 | |
Other payables and accrued expenses | 49 | |
Total liabilities | 3,547 | |
|
|
|
Net Assets | $ 2,520,525 | |
Net Assets consist of: |
| |
Paid in capital | $ 2,071,780 | |
Undistributed net investment income | 15,586 | |
Accumulated undistributed net realized gain (loss) on investments | 61,601 | |
Net unrealized appreciation (depreciation) on investments | 371,558 | |
Net Assets | $ 2,520,525 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 32.26 | |
|
|
|
Maximum offering price per share (100/94.25 of $32.26) | $ 34.23 | |
Class T: | $ 32.26 | |
|
|
|
Maximum offering price per share (100/96.50 of $32.26) | $ 33.43 | |
Class B: | $ 32.21 | |
|
|
|
Class C: | $ 32.05 | |
|
|
|
|
|
|
Convertible Securities: | $ 32.38 | |
|
|
|
Institutional Class: | $ 32.33 |
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
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 20,917 |
Interest |
| 12,880 |
Income from Fidelity Central Funds |
| 160 |
Total income |
| 33,957 |
|
|
|
Expenses | ||
Management fee | $ 5,846 | |
Performance adjustment | (801) | |
Transfer agent fees | 2,121 | |
Distribution and service plan fees | 435 | |
Accounting and security lending fees | 387 | |
Custodian fees and expenses | 15 | |
Independent trustees' compensation | 6 | |
Registration fees | 109 | |
Audit | 37 | |
Legal | 23 | |
Miscellaneous | 10 | |
Total expenses before reductions | 8,188 | |
Expense reductions | (2) | 8,186 |
Net investment income (loss) | 25,771 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers |
| 97,062 |
Change in net unrealized appreciation (depreciation) on investment securities | (103,444) | |
Net gain (loss) | (6,382) | |
Net increase (decrease) in net assets resulting from operations | $ 19,389 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 25,771 | $ 47,314 |
Net realized gain (loss) | 97,062 | 128,507 |
Change in net unrealized appreciation (depreciation) | (103,444) | 87,394 |
Net increase (decrease) in net assets resulting | 19,389 | 263,215 |
Distributions to shareholders from net investment income | (24,294) | (43,691) |
Distributions to shareholders from net realized gain | (87,333) | (16,252) |
Total distributions | (111,627) | (59,943) |
Share transactions - net increase (decrease) | (66,118) | 121,737 |
Total increase (decrease) in net assets | (158,356) | 325,009 |
|
|
|
Net Assets | ||
Beginning of period | 2,678,881 | 2,353,872 |
End of period (including undistributed net investment income of $15,586 and undistributed net investment income of $14,109, respectively) | $ 2,520,525 | $ 2,678,881 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.42 | $ 30.79 | $ 25.08 | $ 22.85 | $ 24.22 | $ 21.25 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .28 | .51 | .57 | .68 | .72 | .75 |
Net realized and unrealized gain (loss) | (.08) | 2.81I | 5.88 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .20 | 3.32 | 6.45 | 2.90 | (.62) | 3.76 |
Distributions from net investment income | (.26) | (.48) | (.74) | (.67) | (.75) | (.79) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.36) | (.69) | (.74) | (.67) | (.75) | (.79) |
Net asset value, end of period | $ 32.26 | $ 33.42 | $ 30.79 | $ 25.08 | $ 22.85 | $ 24.22 |
Total ReturnB, C, D | .72% | 10.95% I | 26.12% | 12.87% | (2.79)% | 18.05% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | .87%A | .86% | .99% | 1.04% | .88% | .87% |
Expenses net of fee waivers, if any | .87%A | .85% | .99% | 1.04% | .88% | .87% |
Expenses net of all reductions | .87%A | .85% | .99% | 1.04% | .88% | .87% |
Net investment income (loss) | 1.74% A | 1.60% | 1.99% | 2.79% | 2.84% | 3.29% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 81 | $ 150 | $ 113 | $ 26 | $ 33 | $ 19 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the sales charges. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.58%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.44 | $ 30.80 | $ 25.09 | $ 22.87 | $ 24.23 | $ 21.25 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .24 | .42 | .48 | .60 | .65 | .69 |
Net realized and unrealized gain (loss) | (.10) | 2.82I | 5.89 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .14 | 3.24 | 6.37 | 2.82 | (.69) | 3.70 |
Distributions from net investment income | (.22) | (.39) | (.66) | (.60) | (.67) | (.72) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.32) | (.60) | (.66) | (.60) | (.67) | (.72) |
Net asset value, end of period | $ 32.26 | $ 33.44 | $ 30.80 | $ 25.09 | $ 22.87 | $ 24.23 |
Total ReturnB, C, D | .54% | 10.67%I | 25.73% | 12.48% | (3.07)% | 17.74% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.15%A | 1.14% | 1.30% | 1.36% | 1.18% | 1.13% |
Expenses net of fee waivers, if any | 1.15%A | 1.14% | 1.30% | 1.36% | 1.18% | 1.13% |
Expenses net of all reductions | 1.15%A | 1.14% | 1.30% | 1.36% | 1.17% | 1.13% |
Net investment income (loss) | 1.46% A | 1.32% | 1.68% | 2.47% | 2.55% | 3.03% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 13 | $ 14 | $ 11 | $ 4 | $ 5 | $ 4 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the sales charges. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.30%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.37 | $ 30.74 | $ 25.04 | $ 22.82 | $ 24.17 | $ 21.22 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .15 | .25 | .32 | .47 | .51 | .56 |
Net realized and unrealized gain (loss) | (.09) | 2.81I | 5.89 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .06 | 3.06 | 6.21 | 2.69 | (.83) | 3.57 |
Distributions from net investment income | (.12) | (.22) | (.51) | (.47) | (.52) | (.62) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.22) | (.43) | (.51) | (.47) | (.52) | (.62) |
Net asset value, end of period | $ 32.21 | $ 33.37 | $ 30.74 | $ 25.04 | $ 22.82 | $ 24.17 |
Total ReturnB, C, D | .29% | 10.05%I | 25.05% | 11.91% | (3.59)% | 17.08% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Expenses net of fee waivers, if any | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Expenses net of all reductions | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Net investment income (loss) | .95%A | .77% | 1.15% | 1.95% | 2.00% | 2.47% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 9.68%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.23 | $ 30.63 | $ 24.97 | $ 22.75 | $ 24.14 | $ 21.20 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .16 | .27 | .34 | .49 | .51 | .56 |
Net realized and unrealized gain (loss) | (.09) | 2.80I | 5.87 | 2.22 | (1.33) | 3.01 |
Total from investment operations | .07 | 3.07 | 6.21 | 2.71 | (.82) | 3.57 |
Distributions from net investment income | (.15) | (.26) | (.55) | (.49) | (.57) | (.63) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.25) | (.47) | (.55) | (.49) | (.57) | (.63) |
Net asset value, end of period | $ 32.05 | $ 33.23 | $ 30.63 | $ 24.97 | $ 22.75 | $ 24.14 |
Total ReturnB, C, D | .32% | 10.13%I | 25.12% | 12.01% | (3.57)% | 17.13% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.63%A | 1.62% | 1.78% | 1.82% | 1.67% | 1.66% |
Expenses net of fee waivers, if any | 1.63%A | 1.62% | 1.77% | 1.82% | 1.67% | 1.66% |
Expenses net of all reductions | 1.63%A | 1.62% | 1.77% | 1.82% | 1.67% | 1.66% |
Net investment income (loss) | .98%A | .84% | 1.20% | 2.01% | 2.06% | 2.50% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 50 | $ 48 | $ 28 | $ 12 | $ 13 | $ 5 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 9.76%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Convertible Securities
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.56 | $ 30.90 | $ 25.16 | $ 22.92 | $ 24.29 | $ 21.30 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .33 | .60 | .64 | .75 | .79 | .81 |
Net realized and unrealized gain (loss) | (.10) | 2.83 H | 5.91 | 2.23 | (1.35) | 3.02 |
Total from investment operations | .23 | 3.43 | 6.55 | 2.98 | (.56) | 3.83 |
Distributions from net investment income | (.31) | (.56) | (.81) | (.74) | (.81) | (.84) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.41) | (.77) | (.81) | (.74) | (.81) | (.84) |
Net asset value, end of period | $ 32.38 | $ 33.56 | $ 30.90 | $ 25.16 | $ 22.92 | $ 24.29 |
Total ReturnB, C | .82% | 11.28% H | 26.44% | 13.20% | (2.54)% | 18.37% |
Ratios to Average Net Assets E, G |
|
|
|
|
| |
Expenses before reductions | .59%A | .58% | .73% | .76% | .61% | .59% |
Expenses net of fee waivers, if any | .59%A | .58% | .72% | .76% | .61% | .59% |
Expenses net of all reductions | .59%A | .58% | .72% | .76% | .61% | .59% |
Net investment income (loss) | 2.01%A | 1.88% | 2.26% | 3.07% | 3.12% | 3.57% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 2,172 | $ 2,307 | $ 2,109 | $ 1,733 | $ 1,904 | $ 2,287 |
Portfolio turnover rateF | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. HNet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.91%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.51 | $ 30.86 | $ 25.13 | $ 22.90 | $ 24.27 | $ 21.29 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .32 | .59 | .64 | .74 | .77 | .80 |
Net realized and unrealized gain (loss) | (.09) | 2.83 H | 5.89 | 2.22 | (1.33) | 3.02 |
Total from investment operations | .23 | 3.42 | 6.53 | 2.96 | (.56) | 3.82 |
Distributions from net investment income | (.31) | (.56) | (.80) | (.73) | (.81) | (.84) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.41) | (.77) | (.80) | (.73) | (.81) | (.84) |
Net asset value, end of period | $ 32.33 | $ 33.51 | $ 30.86 | $ 25.13 | $ 22.90 | $ 24.27 |
Total ReturnB, C | .82% | 11.25% H | 26.42% | 13.11% | (2.55)% | 18.34% |
Ratios to Average Net Assets E, G |
|
|
|
|
| |
Expenses before reductions | .61%A | .61% | .76% | .80% | .65% | .60% |
Expenses net of fee waivers, if any | .61%A | .61% | .76% | .80% | .65% | .60% |
Expenses net of all reductions | .61%A | .61% | .76% | .80% | .65% | .60% |
Net investment income (loss) | 1.99%A | 1.85% | 2.22% | 3.03% | 3.07% | 3.56% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 204 | $ 159 | $ 92 | $ 14 | $ 23 | $ 6 |
Portfolio turnover rateF | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. HNet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.88%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Convertible Securities Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Convertible Securities and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
During the period, the Board of Trustees approved a change in the name of Institutional Class to Class I effective July 1, 2015.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015, is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, contingent interest, equity-debt classifications, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales, and certain conversion ratio adjustments.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 509,956 |
Gross unrealized depreciation | (148,026) |
Net unrealized appreciation (depreciation) on securities | $ 361,930 |
|
|
Tax cost | $ 2,148,046 |
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $317,263 and $302,068, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
5. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Convertible Securities as compared to its benchmark index, the BofA Merrill LynchSM All US Convertibles Index, over the same 36 month performance period. For the reporting period, the total annualized management fee rate, including the performance adjustment, was .39% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 151 | $ 6 |
Class T | .25% | .25% | 34 | -* |
Class B | .75% | .25% | 6 | 4 |
Class C | .75% | .25% | 244 | 79 |
|
|
| $ 435 | $ 89 |
* Amount represents three hundred and twelve dollars.
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 20 |
Class T | 3 |
Class B* | 1 |
Class C* | 7 |
| $ 31 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 111 | .18 |
Class T | 15 | .22 |
Class B | 1 | .22 |
Class C | 48 | .19 |
Convertible Securities | 1,780 | .16 |
Institutional Class | 166 | .18 |
| $ 2,121 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
5. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were two hundred and seventy eight dollars for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to one hundred and twenty nine dollars. During the period, there were no securities loaned to FCM.
Semiannual Report
8. Expense Reductions.
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 two hundred and fifty five dollars.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Convertible Securities expenses during the period in the amount of $2.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Class A | $ 1,034 | $ 2,203 |
Class T | 93 | 157 |
Class B | 5 | 10 |
Class C | 219 | 315 |
Convertible Securities | 21,330 | 38,782 |
Institutional Class | 1,613 | 2,224 |
Total | $ 24,294 | $ 43,691 |
From net realized gain |
|
|
Class A | $ 4,752 | $ 831 |
Class T | 461 | 77 |
Class B | 44 | 9 |
Class C | 1,591 | 204 |
Convertible Securities | 75,279 | 14,428 |
Institutional Class | 5,206 | 703 |
Total | $ 87,333 | $ 16,252 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Class A |
|
|
|
|
Shares sold | 1,097 | 5,975 | $ 35,523 | $ 193,445 |
Reinvestment of distributions | 176 | 50 | 5,520 | 1,587 |
Shares redeemed | (3,269) | (5,200) | (105,443) | (165,097) |
Net increase (decrease) | (1,996) | 825 | $ (64,400) | $ 29,935 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
10. Share Transactions - continued
| Shares | Dollars | ||
| Six months ended | Year ended | Six months ended | Year ended |
Class T |
|
|
|
|
Shares sold | 47 | 223 | $ 1,528 | $ 7,085 |
Reinvestment of distributions | 17 | 7 | 541 | 220 |
Shares redeemed | (85) | (156) | (2,753) | (5,011) |
Net increase (decrease) | (21) | 74 | $ (684) | $ 2,294 |
Class B |
|
|
|
|
Shares sold | 2 | 11 | $ 7 | $ 355 |
Reinvestment of distributions | 1 | 1 | 46 | 16 |
Shares redeemed | (14) | (16) | (436) | (489) |
Net increase (decrease) | (11) | (4) | $ (383) | $ (118) |
Class C |
|
|
|
|
Shares sold | 245 | 787 | $ 7,880 | $ 24,989 |
Reinvestment of distributions | 50 | 13 | 1,571 | 415 |
Shares redeemed | (160) | (285) | (5,122) | (9,080) |
Net increase (decrease) | 135 | 515 | $ 4,329 | $ 16,324 |
Convertible Securities |
|
|
|
|
Shares sold | 3,932 | 12,162 | $ 127,521 | $ 390,632 |
Reinvestment of distributions | 2,706 | 1,483 | 85,360 | 46,826 |
Shares redeemed | (8,319) | (13,141) | (269,411) | (422,086) |
Net increase (decrease) | (1,681) | 504 | $ (56,530) | $ 15,372 |
Institutional Class |
|
|
|
|
Shares sold | 2,962 | 4,834 | $ 96,064 | $ 155,094 |
Reinvestment of distributions | 171 | 73 | 5,382 | 2,295 |
Shares redeemed | (1,543) | (3,158) | (49,896) | (99,459) |
Net increase (decrease) | 1,590 | 1,749 | $ 51,550 | $ 57,930 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
(Fidelity Investment logo)(registered trademark)
ACVSI-USAN-0715 1.884061.106
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®
Convertible Securities
Fund - Class A, Class T, Class B
and Class C
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Class A, Class T, Class B, and
Class C are classes of Fidelity®
Convertible Securities Fund
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Shareholder Expense Example - continued
| Annualized Expense RatioB | Beginning | Ending | Expenses Paid |
Class A | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,007.20 | $ 4.35 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.59 | $ 4.38 |
Class T | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,005.40 | $ 5.75 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.20 | $ 5.79 |
Class B | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,002.90 | $ 8.24 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.70 | $ 8.30 |
Class C | 1.63% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,003.20 | $ 8.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.80 | $ 8.20 |
Convertible Securities | .59% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,008.20 | $ 2.95 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.99 | $ 2.97 |
Institutional Class | .61% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,008.20 | $ 3.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.89 | $ 3.07 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Investments as of May 31, 2015 | ||
(excluding cash equivalents) | % of fund's | % of fund's net assets |
Wells Fargo & Co. 7.50% | 6.6 | 6.3 |
Level 3 Communications, Inc. | 4.8 | 2.0 |
Ford Motor Co. | 4.6 | 4.5 |
Actavis PLC 5.50% | 4.5 | 0.0 |
General Motors Co. | 4.2 | 3.7 |
United Continental Holdings, Inc. | 3.7 | 2.0 |
MGM Mirage, Inc. | 3.5 | 0.0 |
Bank of America Corp. Series L, 7.25% | 3.4 | 3.3 |
Citigroup, Inc. | 3.3 | 3.1 |
Novellus Systems, Inc. 2.625% 5/15/41 | 1.9 | 1.8 |
| 40.5 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Consumer Discretionary | 16.4 | 15.7 |
Financials | 16.3 | 15.5 |
Information Technology | 15.8 | 13.7 |
Health Care | 15.2 | 12.8 |
Industrials | 9.8 | 11.7 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015 * | As of November 30, 2014 ** | ||||||
Convertible |
| Convertible |
| ||||
Stocks 34.3% |
| Stocks 24.2% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 5.1% |
| ** Foreign investments | 3.5% |
|
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Convertible Bonds - 34.1% | ||||
| Principal Amount (000s) | Value (000s) | ||
CONSUMER DISCRETIONARY - 2.0% | ||||
Diversified Consumer Services - 0.2% | ||||
Carriage Services, Inc. 2.75% 3/15/21 | $ 3,160 | $ 3,895 | ||
Household Durables - 1.8% | ||||
K. Hovnanian Enterprises, Inc. 6% 12/1/17 | 4,695 | 4,968 | ||
Lennar Corp. 3.25% 11/15/21 (e) | 20,630 | 41,441 | ||
| 46,409 | |||
TOTAL CONSUMER DISCRETIONARY | 50,304 | |||
ENERGY - 6.4% | ||||
Energy Equipment & Services - 0.8% | ||||
SEACOR Holdings, Inc. 3% 11/15/28 | 7,000 | 6,300 | ||
Vantage Drilling Co. 5.5% 7/15/43 (e) | 20,000 | 12,488 | ||
| 18,788 | |||
Oil, Gas & Consumable Fuels - 5.6% | ||||
Chesapeake Energy Corp. 2.5% 5/15/37 | 10,545 | 10,215 | ||
Clean Energy Fuels Corp. 5.25% 10/1/18 (e) | 10,000 | 7,931 | ||
Cobalt International Energy, Inc. 2.625% 12/1/19 | 55,920 | 43,443 | ||
Peabody Energy Corp. 4.75% 12/15/41 | 103,850 | 26,027 | ||
Scorpio Tankers, Inc. 2.375% 7/1/19 (e) | 25,710 | 27,012 | ||
Whiting Petroleum Corp. 1.25% 4/1/20 (e) | 25,000 | 27,375 | ||
| 142,003 | |||
TOTAL ENERGY | 160,791 | |||
FINANCIALS - 1.0% | ||||
Insurance - 0.8% | ||||
FNF Group 4.25% 8/15/18 | 10,000 | 20,725 | ||
Thrifts & Mortgage Finance - 0.2% | ||||
MGIC Investment Corp. 2% 4/1/20 | 2,000 | 3,248 | ||
TOTAL FINANCIALS | 23,973 | |||
HEALTH CARE - 7.1% | ||||
Biotechnology - 0.7% | ||||
Orexigen Therapeutics, Inc. 2.75% 12/1/20 | 10,000 | 9,356 | ||
Spectrum Pharmaceuticals, Inc. 2.75% 12/15/18 | 10,000 | 9,188 | ||
| 18,544 | |||
Convertible Bonds - continued | ||||
| Principal Amount (000s) | Value (000s) | ||
HEALTH CARE - continued | ||||
Health Care Equipment & Supplies - 2.7% | ||||
Alere, Inc. 3% 5/15/16 | $ 31,000 | $ 37,975 | ||
Hologic, Inc. 2% 3/1/42 (d) | 22,716 | 29,076 | ||
| 67,051 | |||
Health Care Providers & Services - 1.2% | ||||
Molina Healthcare, Inc. 1.125% 1/15/20 | 15,000 | 27,356 | ||
Omnicare, Inc. 3.25% 12/15/35 | 2,086 | 2,588 | ||
| 29,944 | |||
Pharmaceuticals - 2.5% | ||||
Akorn, Inc. 3.5% 6/1/16 | 5,000 | 26,138 | ||
Horizon Pharma Investment Ltd. 2.5% 3/15/22 (e) | 10,000 | 13,600 | ||
Isis Pharmaceuticals, Inc. 2.75% 10/1/19 | 6,000 | 24,364 | ||
| 64,102 | |||
TOTAL HEALTH CARE | 179,641 | |||
INDUSTRIALS - 3.4% | ||||
Electrical Equipment - 0.5% | ||||
General Cable Corp. 4.5% 11/15/29 (d) | 14,800 | 11,942 | ||
Machinery - 2.9% | ||||
Greenbrier Companies, Inc.: | ||||
2.375% 5/15/26 (e) | 5,500 | 6,894 | ||
2.375% 5/15/26 | 8,000 | 10,028 | ||
3.5% 4/1/18 | 12,860 | 20,584 | ||
Terex Corp. 4% 6/15/15 | 9,590 | 15,817 | ||
Trinity Industries, Inc. 3.875% 6/1/36 | 15,000 | 20,681 | ||
| 74,004 | |||
TOTAL INDUSTRIALS | 85,946 | |||
INFORMATION TECHNOLOGY - 13.9% | ||||
Communications Equipment - 1.0% | ||||
Brocade Communications Systems, Inc. 1.375% 1/1/20 (e) | 8,710 | 9,238 | ||
InterDigital, Inc. 1.5% 3/1/20 (e) | 5,650 | 5,954 | ||
JDS Uniphase Corp. 0.625% 8/15/33 | 10,000 | 10,213 | ||
| 25,405 | |||
Convertible Bonds - continued | ||||
| Principal Amount (000s) | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | ||||
Electronic Equipment & Components - 0.5% | ||||
Vishay Intertechnology, Inc.: | ||||
2.25% 11/15/40 | $ 7,000 | $ 7,175 | ||
2.25% 5/15/41 | 7,000 | 5,740 | ||
| 12,915 | |||
Internet Software & Services - 4.1% | ||||
Monster Worldwide, Inc. 3.5% 10/15/19 (e) | 10,000 | 13,318 | ||
Twitter, Inc. 1% 9/15/21 (e) | 30,000 | 27,075 | ||
VeriSign, Inc. 4.136% 8/15/37 (d) | 15,000 | 28,294 | ||
Web.com Group, Inc. 1% 8/15/18 | 5,000 | 4,916 | ||
WebMD Health Corp.: | ||||
2.25% 3/31/16 | 10,000 | 10,050 | ||
2.5% 1/31/18 | 20,000 | 20,538 | ||
| 104,191 | |||
Semiconductors & Semiconductor Equipment - 7.0% | ||||
GT Advanced Technologies, Inc.: | ||||
3% 10/1/17 (c) | 10,000 | 2,850 | ||
3% 12/15/20 (c) | 23,000 | 6,555 | ||
Microchip Technology, Inc. 1.625% 2/15/25 (e) | 35,000 | 36,422 | ||
Micron Technology, Inc. 3.125% 5/1/32 | 12,090 | 34,865 | ||
Novellus Systems, Inc. 2.625% 5/15/41 | 20,000 | 48,013 | ||
ON Semiconductor Corp. 2.625% 12/15/26 | 29,512 | 39,897 | ||
Rambus, Inc. 1.125% 8/15/18 | 5,500 | 7,580 | ||
| 176,182 | |||
Software - 1.3% | ||||
Nuance Communications, Inc. 2.75% 11/1/31 | 32,000 | 32,080 | ||
TOTAL INFORMATION TECHNOLOGY | 350,773 | |||
MATERIALS - 0.3% | ||||
Chemicals - 0.1% | ||||
RPM International, Inc. 2.25% 12/15/20 | 1,950 | 2,279 | ||
Metals & Mining - 0.2% | ||||
Horsehead Holding Corp. 3.8% 7/1/17 | 5,000 | 5,264 | ||
TOTAL MATERIALS | 7,543 | |||
TOTAL CONVERTIBLE BONDS (Cost $771,793) |
|
Common Stocks - 34.3% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 14.4% | |||
Automobiles - 8.8% | |||
Ford Motor Co. | 7,701,262 | $ 116,828 | |
General Motors Co. | 2,926,368 | 105,261 | |
| 222,089 | ||
Diversified Consumer Services - 0.0% | |||
Houghton Mifflin Harcourt Co. warrants 6/22/19 (a)(f) | 686 | 12 | |
Hotels, Restaurants & Leisure - 3.5% | |||
MGM Mirage, Inc. (a) | 4,430,266 | 88,827 | |
Media - 2.1% | |||
Interpublic Group of Companies, Inc. | 778,966 | 15,906 | |
Liberty Global PLC: | |||
Class A (a) | 110,641 | 6,365 | |
Class C (a) | 275,873 | 14,828 | |
Sirius XM Holdings, Inc. (a) | 4,073,529 | 15,724 | |
| 52,823 | ||
TOTAL CONSUMER DISCRETIONARY | 363,751 | ||
ENERGY - 1.3% | |||
Oil, Gas & Consumable Fuels - 1.3% | |||
Western Refining, Inc. | 772,344 | 33,968 | |
FINANCIALS - 4.1% | |||
Banks - 3.3% | |||
Citigroup, Inc. | 1,545,034 | 83,555 | |
Insurance - 0.8% | |||
MetLife, Inc. | 369,100 | 19,289 | |
TOTAL FINANCIALS | 102,844 | ||
HEALTH CARE - 2.1% | |||
Health Care Providers & Services - 2.1% | |||
Omnicare, Inc. | 100,506 | 9,577 | |
Tenet Healthcare Corp. (a) | 821,302 | 43,685 | |
| 53,262 | ||
INDUSTRIALS - 5.7% | |||
Aerospace & Defense - 0.5% | |||
Textron, Inc. | 267,361 | 12,090 | |
Airlines - 3.7% | |||
United Continental Holdings, Inc. (a) | 1,689,010 | 92,203 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - continued | |||
Building Products - 0.1% | |||
Allegion PlC | 57,913 | $ 3,616 | |
Machinery - 0.5% | |||
Ingersoll-Rand PLC | 173,739 | 11,950 | |
Road & Rail - 0.9% | |||
Hertz Global Holdings, Inc. (a) | 1,206,637 | 24,000 | |
TOTAL INDUSTRIALS | 143,859 | ||
INFORMATION TECHNOLOGY - 1.9% | |||
Electronic Equipment & Components - 0.4% | |||
Viasystems Group, Inc. (a) | 549,643 | 10,042 | |
Semiconductors & Semiconductor Equipment - 0.8% | |||
ON Semiconductor Corp. (a) | 1,435,900 | 19,040 | |
Technology Hardware, Storage & Peripherals - 0.7% | |||
EMC Corp. | 574,571 | 15,134 | |
NetApp, Inc. | 76,367 | 2,551 | |
| 17,685 | ||
TOTAL INFORMATION TECHNOLOGY | 46,767 | ||
TELECOMMUNICATION SERVICES - 4.8% | |||
Diversified Telecommunication Services - 4.8% | |||
Level 3 Communications, Inc. (a) | 2,181,015 | 121,003 | |
TOTAL COMMON STOCKS (Cost $613,404) |
| ||
Convertible Preferred Stocks - 26.3% | |||
|
|
|
|
CONSUMER STAPLES - 3.4% | |||
Food Products - 3.4% | |||
Bunge Ltd. 4.875% (a) | 237,000 | 26,470 | |
Post Holdings, Inc.: | |||
3.75% (a)(e) | 100,000 | 10,053 | |
Series C, 2.50% (a)(e) | 100,000 | 8,700 | |
Tyson Foods, Inc. 4.75% (a) | 800,000 | 41,576 | |
| 86,799 | ||
Convertible Preferred Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - 1.6% | |||
Oil, Gas & Consumable Fuels - 1.6% | |||
Chesapeake Energy Corp. Series A, 5.75% (e) | 50,700 | $ 41,447 | |
FINANCIALS - 11.2% | |||
Banks - 10.1% | |||
Bank of America Corp. Series L, 7.25% | 74,135 | 84,922 | |
Huntington Bancshares, Inc. 8.50% (a) | 2,100 | 2,825 | |
Wells Fargo & Co. 7.50% | 137,632 | 166,369 | |
| 254,116 | ||
Real Estate Investment Trusts - 1.1% | |||
American Tower Corp. Series A, 5.25% (a) | 50,100 | 5,153 | |
Crown Castle International Corp. 4.50% | 72,900 | 7,498 | |
Weyerhaeuser Co. Series A, 6.375% | 271,200 | 14,704 | |
| 27,355 | ||
TOTAL FINANCIALS | 281,471 | ||
HEALTH CARE - 6.0% | |||
Health Care Providers & Services - 1.5% | |||
Anthem, Inc. 5.25% (a) | 712,000 | 38,035 | |
Pharmaceuticals - 4.5% | |||
Actavis PLC 5.50% | 105,500 | 111,827 | |
TOTAL HEALTH CARE | 149,862 | ||
INDUSTRIALS - 0.7% | |||
Aerospace & Defense - 0.1% | |||
United Technologies Corp. 7.50% | 45,700 | 2,784 | |
Road & Rail - 0.6% | |||
Genesee & Wyoming, Inc. 5.00% (a) | 137,000 | 14,545 | |
TOTAL INDUSTRIALS | 17,329 | ||
MATERIALS - 1.1% | |||
Metals & Mining - 1.1% | |||
Alcoa, Inc. Series 1, 5.375% (a) | 400,000 | 17,536 | |
ArcelorMittal SA 6.00% (a) | 568,500 | 9,842 | |
| 27,378 | ||
TELECOMMUNICATION SERVICES - 1.1% | |||
Wireless Telecommunication Services - 1.1% | |||
T-Mobile U.S., Inc. Series A 5.50% (a) | 397,500 | 27,336 | |
Convertible Preferred Stocks - continued | |||
Shares | Value (000s) | ||
UTILITIES - 1.2% | |||
Electric Utilities - 0.3% | |||
Exelon Corp. 6.50% | 171,500 | $ 8,285 | |
Independent Power and Renewable Electricity Producers - 0.9% | |||
Dynegy, Inc. 5.375% (a) | 200,000 | 22,396 | |
TOTAL UTILITIES | 30,681 | ||
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $629,973) |
| ||
Money Market Funds - 4.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.15% (b) | 123,247,589 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $2,138,418) | 2,509,976 | ||
NET OTHER ASSETS (LIABILITIES) - 0.4% | 10,549 | ||
NET ASSETS - 100% | $ 2,520,525 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(c) Non-income producing - Security is in default. |
(d) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $288,948,000 or 11.5% of net assets. |
(f) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $12,000 or 0.0% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Houghton Mifflin Harcourt Co. warrants 6/22/19 | 6/22/12 | $ 1 |
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 | $ 160 |
Fidelity Securities Lending Cash Central Fund | 0* |
Total | $ 160 |
* Amount represents one hundred and twenty nine dollars. |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 363,751 | $ 363,739 | $ 12 | $ - |
Consumer Staples | 86,799 | 41,576 | 45,223 | - |
Energy | 75,415 | 33,968 | 41,447 | - |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Financials | $ 384,315 | $ 369,611 | $ 14,704 | $ - |
Health Care | 203,124 | 165,089 | 38,035 | - |
Industrials | 161,188 | 146,643 | 14,545 | - |
Information Technology | 46,767 | 46,767 | - | - |
Materials | 27,378 | 17,536 | 9,842 | - |
Telecommunication Services | 148,339 | 148,339 | - | - |
Utilities | 30,681 | 30,681 | - | - |
Corporate Bonds | 858,971 | - | 858,971 | - |
Money Market Funds | 123,248 | 123,248 | - | - |
Total Investments in Securities: | $ 2,509,976 | $ 1,487,197 | $ 1,022,779 | $ - |
The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited): |
BBB | 2.8% |
BB | 11.9% |
B | 2.1% |
CCC,CC,C | 5.4% |
Not Rated | 11.9% |
Equities | 60.6% |
Short-Term Investments and Net Other Assets | 5.3% |
| 100.0% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. |
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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $2,015,170) | $ 2,386,728 |
|
Fidelity Central Funds (cost $123,248) | 123,248 |
|
Total Investments (cost $2,138,418) |
| $ 2,509,976 |
Receivable for fund shares sold | 1,157 | |
Dividends receivable | 6,112 | |
Interest receivable | 6,799 | |
Distributions receivable from Fidelity Central Funds | 21 | |
Prepaid expenses | 1 | |
Other receivables | 6 | |
Total assets | 2,524,072 | |
|
|
|
Liabilities | ||
Payable for fund shares redeemed | $ 2,323 | |
Accrued management fee | 694 | |
Transfer agent fee payable | 348 | |
Distribution and service plan fees payable | 68 | |
Other affiliated payables | 65 | |
Other payables and accrued expenses | 49 | |
Total liabilities | 3,547 | |
|
|
|
Net Assets | $ 2,520,525 | |
Net Assets consist of: |
| |
Paid in capital | $ 2,071,780 | |
Undistributed net investment income | 15,586 | |
Accumulated undistributed net realized gain (loss) on investments | 61,601 | |
Net unrealized appreciation (depreciation) on investments | 371,558 | |
Net Assets | $ 2,520,525 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 32.26 | |
|
|
|
Maximum offering price per share (100/94.25 of $32.26) | $ 34.23 | |
Class T: | $ 32.26 | |
|
|
|
Maximum offering price per share (100/96.50 of $32.26) | $ 33.43 | |
Class B: | $ 32.21 | |
|
|
|
Class C: | $ 32.05 | |
|
|
|
|
|
|
Convertible Securities: | $ 32.38 | |
|
|
|
Institutional Class: | $ 32.33 |
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
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 20,917 |
Interest |
| 12,880 |
Income from Fidelity Central Funds |
| 160 |
Total income |
| 33,957 |
|
|
|
Expenses | ||
Management fee | $ 5,846 | |
Performance adjustment | (801) | |
Transfer agent fees | 2,121 | |
Distribution and service plan fees | 435 | |
Accounting and security lending fees | 387 | |
Custodian fees and expenses | 15 | |
Independent trustees' compensation | 6 | |
Registration fees | 109 | |
Audit | 37 | |
Legal | 23 | |
Miscellaneous | 10 | |
Total expenses before reductions | 8,188 | |
Expense reductions | (2) | 8,186 |
Net investment income (loss) | 25,771 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers |
| 97,062 |
Change in net unrealized appreciation (depreciation) on investment securities | (103,444) | |
Net gain (loss) | (6,382) | |
Net increase (decrease) in net assets resulting from operations | $ 19,389 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 25,771 | $ 47,314 |
Net realized gain (loss) | 97,062 | 128,507 |
Change in net unrealized appreciation (depreciation) | (103,444) | 87,394 |
Net increase (decrease) in net assets resulting | 19,389 | 263,215 |
Distributions to shareholders from net investment income | (24,294) | (43,691) |
Distributions to shareholders from net realized gain | (87,333) | (16,252) |
Total distributions | (111,627) | (59,943) |
Share transactions - net increase (decrease) | (66,118) | 121,737 |
Total increase (decrease) in net assets | (158,356) | 325,009 |
|
|
|
Net Assets | ||
Beginning of period | 2,678,881 | 2,353,872 |
End of period (including undistributed net investment income of $15,586 and undistributed net investment income of $14,109, respectively) | $ 2,520,525 | $ 2,678,881 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.42 | $ 30.79 | $ 25.08 | $ 22.85 | $ 24.22 | $ 21.25 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .28 | .51 | .57 | .68 | .72 | .75 |
Net realized and unrealized gain (loss) | (.08) | 2.81I | 5.88 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .20 | 3.32 | 6.45 | 2.90 | (.62) | 3.76 |
Distributions from net investment income | (.26) | (.48) | (.74) | (.67) | (.75) | (.79) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.36) | (.69) | (.74) | (.67) | (.75) | (.79) |
Net asset value, end of period | $ 32.26 | $ 33.42 | $ 30.79 | $ 25.08 | $ 22.85 | $ 24.22 |
Total ReturnB, C, D | .72% | 10.95% I | 26.12% | 12.87% | (2.79)% | 18.05% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | .87%A | .86% | .99% | 1.04% | .88% | .87% |
Expenses net of fee waivers, if any | .87%A | .85% | .99% | 1.04% | .88% | .87% |
Expenses net of all reductions | .87%A | .85% | .99% | 1.04% | .88% | .87% |
Net investment income (loss) | 1.74% A | 1.60% | 1.99% | 2.79% | 2.84% | 3.29% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 81 | $ 150 | $ 113 | $ 26 | $ 33 | $ 19 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the sales charges. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.58%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.44 | $ 30.80 | $ 25.09 | $ 22.87 | $ 24.23 | $ 21.25 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .24 | .42 | .48 | .60 | .65 | .69 |
Net realized and unrealized gain (loss) | (.10) | 2.82I | 5.89 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .14 | 3.24 | 6.37 | 2.82 | (.69) | 3.70 |
Distributions from net investment income | (.22) | (.39) | (.66) | (.60) | (.67) | (.72) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.32) | (.60) | (.66) | (.60) | (.67) | (.72) |
Net asset value, end of period | $ 32.26 | $ 33.44 | $ 30.80 | $ 25.09 | $ 22.87 | $ 24.23 |
Total ReturnB, C, D | .54% | 10.67%I | 25.73% | 12.48% | (3.07)% | 17.74% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.15%A | 1.14% | 1.30% | 1.36% | 1.18% | 1.13% |
Expenses net of fee waivers, if any | 1.15%A | 1.14% | 1.30% | 1.36% | 1.18% | 1.13% |
Expenses net of all reductions | 1.15%A | 1.14% | 1.30% | 1.36% | 1.17% | 1.13% |
Net investment income (loss) | 1.46% A | 1.32% | 1.68% | 2.47% | 2.55% | 3.03% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 13 | $ 14 | $ 11 | $ 4 | $ 5 | $ 4 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the sales charges. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.30%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.37 | $ 30.74 | $ 25.04 | $ 22.82 | $ 24.17 | $ 21.22 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .15 | .25 | .32 | .47 | .51 | .56 |
Net realized and unrealized gain (loss) | (.09) | 2.81I | 5.89 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .06 | 3.06 | 6.21 | 2.69 | (.83) | 3.57 |
Distributions from net investment income | (.12) | (.22) | (.51) | (.47) | (.52) | (.62) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.22) | (.43) | (.51) | (.47) | (.52) | (.62) |
Net asset value, end of period | $ 32.21 | $ 33.37 | $ 30.74 | $ 25.04 | $ 22.82 | $ 24.17 |
Total ReturnB, C, D | .29% | 10.05%I | 25.05% | 11.91% | (3.59)% | 17.08% |
Ratios to Average Net Assets F, H |
|
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| |
Expenses before reductions | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Expenses net of fee waivers, if any | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Expenses net of all reductions | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Net investment income (loss) | .95%A | .77% | 1.15% | 1.95% | 2.00% | 2.47% |
Supplemental Data |
|
|
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|
|
|
Net assets, end of period (in millions) | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 9.68%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.23 | $ 30.63 | $ 24.97 | $ 22.75 | $ 24.14 | $ 21.20 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .16 | .27 | .34 | .49 | .51 | .56 |
Net realized and unrealized gain (loss) | (.09) | 2.80I | 5.87 | 2.22 | (1.33) | 3.01 |
Total from investment operations | .07 | 3.07 | 6.21 | 2.71 | (.82) | 3.57 |
Distributions from net investment income | (.15) | (.26) | (.55) | (.49) | (.57) | (.63) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.25) | (.47) | (.55) | (.49) | (.57) | (.63) |
Net asset value, end of period | $ 32.05 | $ 33.23 | $ 30.63 | $ 24.97 | $ 22.75 | $ 24.14 |
Total ReturnB, C, D | .32% | 10.13%I | 25.12% | 12.01% | (3.57)% | 17.13% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.63%A | 1.62% | 1.78% | 1.82% | 1.67% | 1.66% |
Expenses net of fee waivers, if any | 1.63%A | 1.62% | 1.77% | 1.82% | 1.67% | 1.66% |
Expenses net of all reductions | 1.63%A | 1.62% | 1.77% | 1.82% | 1.67% | 1.66% |
Net investment income (loss) | .98%A | .84% | 1.20% | 2.01% | 2.06% | 2.50% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 50 | $ 48 | $ 28 | $ 12 | $ 13 | $ 5 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 9.76%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Convertible Securities
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.56 | $ 30.90 | $ 25.16 | $ 22.92 | $ 24.29 | $ 21.30 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .33 | .60 | .64 | .75 | .79 | .81 |
Net realized and unrealized gain (loss) | (.10) | 2.83 H | 5.91 | 2.23 | (1.35) | 3.02 |
Total from investment operations | .23 | 3.43 | 6.55 | 2.98 | (.56) | 3.83 |
Distributions from net investment income | (.31) | (.56) | (.81) | (.74) | (.81) | (.84) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.41) | (.77) | (.81) | (.74) | (.81) | (.84) |
Net asset value, end of period | $ 32.38 | $ 33.56 | $ 30.90 | $ 25.16 | $ 22.92 | $ 24.29 |
Total ReturnB, C | .82% | 11.28% H | 26.44% | 13.20% | (2.54)% | 18.37% |
Ratios to Average Net Assets E, G |
|
|
|
|
| |
Expenses before reductions | .59%A | .58% | .73% | .76% | .61% | .59% |
Expenses net of fee waivers, if any | .59%A | .58% | .72% | .76% | .61% | .59% |
Expenses net of all reductions | .59%A | .58% | .72% | .76% | .61% | .59% |
Net investment income (loss) | 2.01%A | 1.88% | 2.26% | 3.07% | 3.12% | 3.57% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 2,172 | $ 2,307 | $ 2,109 | $ 1,733 | $ 1,904 | $ 2,287 |
Portfolio turnover rateF | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. HNet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.91%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.51 | $ 30.86 | $ 25.13 | $ 22.90 | $ 24.27 | $ 21.29 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .32 | .59 | .64 | .74 | .77 | .80 |
Net realized and unrealized gain (loss) | (.09) | 2.83 H | 5.89 | 2.22 | (1.33) | 3.02 |
Total from investment operations | .23 | 3.42 | 6.53 | 2.96 | (.56) | 3.82 |
Distributions from net investment income | (.31) | (.56) | (.80) | (.73) | (.81) | (.84) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.41) | (.77) | (.80) | (.73) | (.81) | (.84) |
Net asset value, end of period | $ 32.33 | $ 33.51 | $ 30.86 | $ 25.13 | $ 22.90 | $ 24.27 |
Total ReturnB, C | .82% | 11.25% H | 26.42% | 13.11% | (2.55)% | 18.34% |
Ratios to Average Net Assets E, G |
|
|
|
|
| |
Expenses before reductions | .61%A | .61% | .76% | .80% | .65% | .60% |
Expenses net of fee waivers, if any | .61%A | .61% | .76% | .80% | .65% | .60% |
Expenses net of all reductions | .61%A | .61% | .76% | .80% | .65% | .60% |
Net investment income (loss) | 1.99%A | 1.85% | 2.22% | 3.03% | 3.07% | 3.56% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 204 | $ 159 | $ 92 | $ 14 | $ 23 | $ 6 |
Portfolio turnover rateF | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. HNet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.88%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Convertible Securities Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Convertible Securities and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
During the period, the Board of Trustees approved a change in the name of Institutional Class to Class I effective July 1, 2015.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015, is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, contingent interest, equity-debt classifications, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales, and certain conversion ratio adjustments.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 509,956 |
Gross unrealized depreciation | (148,026) |
Net unrealized appreciation (depreciation) on securities | $ 361,930 |
|
|
Tax cost | $ 2,148,046 |
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $317,263 and $302,068, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
5. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Convertible Securities as compared to its benchmark index, the BofA Merrill LynchSM All US Convertibles Index, over the same 36 month performance period. For the reporting period, the total annualized management fee rate, including the performance adjustment, was .39% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 151 | $ 6 |
Class T | .25% | .25% | 34 | -* |
Class B | .75% | .25% | 6 | 4 |
Class C | .75% | .25% | 244 | 79 |
|
|
| $ 435 | $ 89 |
* Amount represents three hundred and twelve dollars.
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 20 |
Class T | 3 |
Class B* | 1 |
Class C* | 7 |
| $ 31 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 111 | .18 |
Class T | 15 | .22 |
Class B | 1 | .22 |
Class C | 48 | .19 |
Convertible Securities | 1,780 | .16 |
Institutional Class | 166 | .18 |
| $ 2,121 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
5. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were two hundred and seventy eight dollars for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to one hundred and twenty nine dollars. During the period, there were no securities loaned to FCM.
Semiannual Report
8. Expense Reductions.
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 two hundred and fifty five dollars.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Convertible Securities expenses during the period in the amount of $2.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Class A | $ 1,034 | $ 2,203 |
Class T | 93 | 157 |
Class B | 5 | 10 |
Class C | 219 | 315 |
Convertible Securities | 21,330 | 38,782 |
Institutional Class | 1,613 | 2,224 |
Total | $ 24,294 | $ 43,691 |
From net realized gain |
|
|
Class A | $ 4,752 | $ 831 |
Class T | 461 | 77 |
Class B | 44 | 9 |
Class C | 1,591 | 204 |
Convertible Securities | 75,279 | 14,428 |
Institutional Class | 5,206 | 703 |
Total | $ 87,333 | $ 16,252 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Class A |
|
|
|
|
Shares sold | 1,097 | 5,975 | $ 35,523 | $ 193,445 |
Reinvestment of distributions | 176 | 50 | 5,520 | 1,587 |
Shares redeemed | (3,269) | (5,200) | (105,443) | (165,097) |
Net increase (decrease) | (1,996) | 825 | $ (64,400) | $ 29,935 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
10. Share Transactions - continued
| Shares | Dollars | ||
| Six months ended | Year ended | Six months ended | Year ended |
Class T |
|
|
|
|
Shares sold | 47 | 223 | $ 1,528 | $ 7,085 |
Reinvestment of distributions | 17 | 7 | 541 | 220 |
Shares redeemed | (85) | (156) | (2,753) | (5,011) |
Net increase (decrease) | (21) | 74 | $ (684) | $ 2,294 |
Class B |
|
|
|
|
Shares sold | 2 | 11 | $ 7 | $ 355 |
Reinvestment of distributions | 1 | 1 | 46 | 16 |
Shares redeemed | (14) | (16) | (436) | (489) |
Net increase (decrease) | (11) | (4) | $ (383) | $ (118) |
Class C |
|
|
|
|
Shares sold | 245 | 787 | $ 7,880 | $ 24,989 |
Reinvestment of distributions | 50 | 13 | 1,571 | 415 |
Shares redeemed | (160) | (285) | (5,122) | (9,080) |
Net increase (decrease) | 135 | 515 | $ 4,329 | $ 16,324 |
Convertible Securities |
|
|
|
|
Shares sold | 3,932 | 12,162 | $ 127,521 | $ 390,632 |
Reinvestment of distributions | 2,706 | 1,483 | 85,360 | 46,826 |
Shares redeemed | (8,319) | (13,141) | (269,411) | (422,086) |
Net increase (decrease) | (1,681) | 504 | $ (56,530) | $ 15,372 |
Institutional Class |
|
|
|
|
Shares sold | 2,962 | 4,834 | $ 96,064 | $ 155,094 |
Reinvestment of distributions | 171 | 73 | 5,382 | 2,295 |
Shares redeemed | (1,543) | (3,158) | (49,896) | (99,459) |
Net increase (decrease) | 1,590 | 1,749 | $ 51,550 | $ 57,930 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
(Fidelity Investment logo)(registered trademark)
ACVS-USAN-0715 1.884069.106
Fidelity®
Convertible Securities
Fund
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Shareholder Expense Example - continued
| Annualized Expense RatioB | Beginning | Ending | Expenses Paid |
Class A | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,007.20 | $ 4.35 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.59 | $ 4.38 |
Class T | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,005.40 | $ 5.75 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.20 | $ 5.79 |
Class B | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,002.90 | $ 8.24 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.70 | $ 8.30 |
Class C | 1.63% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,003.20 | $ 8.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.80 | $ 8.20 |
Convertible Securities | .59% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,008.20 | $ 2.95 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.99 | $ 2.97 |
Institutional Class | .61% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,008.20 | $ 3.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.89 | $ 3.07 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Investments as of May 31, 2015 | ||
(excluding cash equivalents) | % of fund's | % of fund's net assets |
Wells Fargo & Co. 7.50% | 6.6 | 6.3 |
Level 3 Communications, Inc. | 4.8 | 2.0 |
Ford Motor Co. | 4.6 | 4.5 |
Actavis PLC 5.50% | 4.5 | 0.0 |
General Motors Co. | 4.2 | 3.7 |
United Continental Holdings, Inc. | 3.7 | 2.0 |
MGM Mirage, Inc. | 3.5 | 0.0 |
Bank of America Corp. Series L, 7.25% | 3.4 | 3.3 |
Citigroup, Inc. | 3.3 | 3.1 |
Novellus Systems, Inc. 2.625% 5/15/41 | 1.9 | 1.8 |
| 40.5 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Consumer Discretionary | 16.4 | 15.7 |
Financials | 16.3 | 15.5 |
Information Technology | 15.8 | 13.7 |
Health Care | 15.2 | 12.8 |
Industrials | 9.8 | 11.7 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015 * | As of November 30, 2014 ** | ||||||
Convertible |
| Convertible |
| ||||
Stocks 34.3% |
| Stocks 24.2% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 5.1% |
| ** Foreign investments | 3.5% |
|
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Convertible Bonds - 34.1% | ||||
| Principal Amount (000s) | Value (000s) | ||
CONSUMER DISCRETIONARY - 2.0% | ||||
Diversified Consumer Services - 0.2% | ||||
Carriage Services, Inc. 2.75% 3/15/21 | $ 3,160 | $ 3,895 | ||
Household Durables - 1.8% | ||||
K. Hovnanian Enterprises, Inc. 6% 12/1/17 | 4,695 | 4,968 | ||
Lennar Corp. 3.25% 11/15/21 (e) | 20,630 | 41,441 | ||
| 46,409 | |||
TOTAL CONSUMER DISCRETIONARY | 50,304 | |||
ENERGY - 6.4% | ||||
Energy Equipment & Services - 0.8% | ||||
SEACOR Holdings, Inc. 3% 11/15/28 | 7,000 | 6,300 | ||
Vantage Drilling Co. 5.5% 7/15/43 (e) | 20,000 | 12,488 | ||
| 18,788 | |||
Oil, Gas & Consumable Fuels - 5.6% | ||||
Chesapeake Energy Corp. 2.5% 5/15/37 | 10,545 | 10,215 | ||
Clean Energy Fuels Corp. 5.25% 10/1/18 (e) | 10,000 | 7,931 | ||
Cobalt International Energy, Inc. 2.625% 12/1/19 | 55,920 | 43,443 | ||
Peabody Energy Corp. 4.75% 12/15/41 | 103,850 | 26,027 | ||
Scorpio Tankers, Inc. 2.375% 7/1/19 (e) | 25,710 | 27,012 | ||
Whiting Petroleum Corp. 1.25% 4/1/20 (e) | 25,000 | 27,375 | ||
| 142,003 | |||
TOTAL ENERGY | 160,791 | |||
FINANCIALS - 1.0% | ||||
Insurance - 0.8% | ||||
FNF Group 4.25% 8/15/18 | 10,000 | 20,725 | ||
Thrifts & Mortgage Finance - 0.2% | ||||
MGIC Investment Corp. 2% 4/1/20 | 2,000 | 3,248 | ||
TOTAL FINANCIALS | 23,973 | |||
HEALTH CARE - 7.1% | ||||
Biotechnology - 0.7% | ||||
Orexigen Therapeutics, Inc. 2.75% 12/1/20 | 10,000 | 9,356 | ||
Spectrum Pharmaceuticals, Inc. 2.75% 12/15/18 | 10,000 | 9,188 | ||
| 18,544 | |||
Convertible Bonds - continued | ||||
| Principal Amount (000s) | Value (000s) | ||
HEALTH CARE - continued | ||||
Health Care Equipment & Supplies - 2.7% | ||||
Alere, Inc. 3% 5/15/16 | $ 31,000 | $ 37,975 | ||
Hologic, Inc. 2% 3/1/42 (d) | 22,716 | 29,076 | ||
| 67,051 | |||
Health Care Providers & Services - 1.2% | ||||
Molina Healthcare, Inc. 1.125% 1/15/20 | 15,000 | 27,356 | ||
Omnicare, Inc. 3.25% 12/15/35 | 2,086 | 2,588 | ||
| 29,944 | |||
Pharmaceuticals - 2.5% | ||||
Akorn, Inc. 3.5% 6/1/16 | 5,000 | 26,138 | ||
Horizon Pharma Investment Ltd. 2.5% 3/15/22 (e) | 10,000 | 13,600 | ||
Isis Pharmaceuticals, Inc. 2.75% 10/1/19 | 6,000 | 24,364 | ||
| 64,102 | |||
TOTAL HEALTH CARE | 179,641 | |||
INDUSTRIALS - 3.4% | ||||
Electrical Equipment - 0.5% | ||||
General Cable Corp. 4.5% 11/15/29 (d) | 14,800 | 11,942 | ||
Machinery - 2.9% | ||||
Greenbrier Companies, Inc.: | ||||
2.375% 5/15/26 (e) | 5,500 | 6,894 | ||
2.375% 5/15/26 | 8,000 | 10,028 | ||
3.5% 4/1/18 | 12,860 | 20,584 | ||
Terex Corp. 4% 6/15/15 | 9,590 | 15,817 | ||
Trinity Industries, Inc. 3.875% 6/1/36 | 15,000 | 20,681 | ||
| 74,004 | |||
TOTAL INDUSTRIALS | 85,946 | |||
INFORMATION TECHNOLOGY - 13.9% | ||||
Communications Equipment - 1.0% | ||||
Brocade Communications Systems, Inc. 1.375% 1/1/20 (e) | 8,710 | 9,238 | ||
InterDigital, Inc. 1.5% 3/1/20 (e) | 5,650 | 5,954 | ||
JDS Uniphase Corp. 0.625% 8/15/33 | 10,000 | 10,213 | ||
| 25,405 | |||
Convertible Bonds - continued | ||||
| Principal Amount (000s) | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | ||||
Electronic Equipment & Components - 0.5% | ||||
Vishay Intertechnology, Inc.: | ||||
2.25% 11/15/40 | $ 7,000 | $ 7,175 | ||
2.25% 5/15/41 | 7,000 | 5,740 | ||
| 12,915 | |||
Internet Software & Services - 4.1% | ||||
Monster Worldwide, Inc. 3.5% 10/15/19 (e) | 10,000 | 13,318 | ||
Twitter, Inc. 1% 9/15/21 (e) | 30,000 | 27,075 | ||
VeriSign, Inc. 4.136% 8/15/37 (d) | 15,000 | 28,294 | ||
Web.com Group, Inc. 1% 8/15/18 | 5,000 | 4,916 | ||
WebMD Health Corp.: | ||||
2.25% 3/31/16 | 10,000 | 10,050 | ||
2.5% 1/31/18 | 20,000 | 20,538 | ||
| 104,191 | |||
Semiconductors & Semiconductor Equipment - 7.0% | ||||
GT Advanced Technologies, Inc.: | ||||
3% 10/1/17 (c) | 10,000 | 2,850 | ||
3% 12/15/20 (c) | 23,000 | 6,555 | ||
Microchip Technology, Inc. 1.625% 2/15/25 (e) | 35,000 | 36,422 | ||
Micron Technology, Inc. 3.125% 5/1/32 | 12,090 | 34,865 | ||
Novellus Systems, Inc. 2.625% 5/15/41 | 20,000 | 48,013 | ||
ON Semiconductor Corp. 2.625% 12/15/26 | 29,512 | 39,897 | ||
Rambus, Inc. 1.125% 8/15/18 | 5,500 | 7,580 | ||
| 176,182 | |||
Software - 1.3% | ||||
Nuance Communications, Inc. 2.75% 11/1/31 | 32,000 | 32,080 | ||
TOTAL INFORMATION TECHNOLOGY | 350,773 | |||
MATERIALS - 0.3% | ||||
Chemicals - 0.1% | ||||
RPM International, Inc. 2.25% 12/15/20 | 1,950 | 2,279 | ||
Metals & Mining - 0.2% | ||||
Horsehead Holding Corp. 3.8% 7/1/17 | 5,000 | 5,264 | ||
TOTAL MATERIALS | 7,543 | |||
TOTAL CONVERTIBLE BONDS (Cost $771,793) |
|
Common Stocks - 34.3% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 14.4% | |||
Automobiles - 8.8% | |||
Ford Motor Co. | 7,701,262 | $ 116,828 | |
General Motors Co. | 2,926,368 | 105,261 | |
| 222,089 | ||
Diversified Consumer Services - 0.0% | |||
Houghton Mifflin Harcourt Co. warrants 6/22/19 (a)(f) | 686 | 12 | |
Hotels, Restaurants & Leisure - 3.5% | |||
MGM Mirage, Inc. (a) | 4,430,266 | 88,827 | |
Media - 2.1% | |||
Interpublic Group of Companies, Inc. | 778,966 | 15,906 | |
Liberty Global PLC: | |||
Class A (a) | 110,641 | 6,365 | |
Class C (a) | 275,873 | 14,828 | |
Sirius XM Holdings, Inc. (a) | 4,073,529 | 15,724 | |
| 52,823 | ||
TOTAL CONSUMER DISCRETIONARY | 363,751 | ||
ENERGY - 1.3% | |||
Oil, Gas & Consumable Fuels - 1.3% | |||
Western Refining, Inc. | 772,344 | 33,968 | |
FINANCIALS - 4.1% | |||
Banks - 3.3% | |||
Citigroup, Inc. | 1,545,034 | 83,555 | |
Insurance - 0.8% | |||
MetLife, Inc. | 369,100 | 19,289 | |
TOTAL FINANCIALS | 102,844 | ||
HEALTH CARE - 2.1% | |||
Health Care Providers & Services - 2.1% | |||
Omnicare, Inc. | 100,506 | 9,577 | |
Tenet Healthcare Corp. (a) | 821,302 | 43,685 | |
| 53,262 | ||
INDUSTRIALS - 5.7% | |||
Aerospace & Defense - 0.5% | |||
Textron, Inc. | 267,361 | 12,090 | |
Airlines - 3.7% | |||
United Continental Holdings, Inc. (a) | 1,689,010 | 92,203 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - continued | |||
Building Products - 0.1% | |||
Allegion PlC | 57,913 | $ 3,616 | |
Machinery - 0.5% | |||
Ingersoll-Rand PLC | 173,739 | 11,950 | |
Road & Rail - 0.9% | |||
Hertz Global Holdings, Inc. (a) | 1,206,637 | 24,000 | |
TOTAL INDUSTRIALS | 143,859 | ||
INFORMATION TECHNOLOGY - 1.9% | |||
Electronic Equipment & Components - 0.4% | |||
Viasystems Group, Inc. (a) | 549,643 | 10,042 | |
Semiconductors & Semiconductor Equipment - 0.8% | |||
ON Semiconductor Corp. (a) | 1,435,900 | 19,040 | |
Technology Hardware, Storage & Peripherals - 0.7% | |||
EMC Corp. | 574,571 | 15,134 | |
NetApp, Inc. | 76,367 | 2,551 | |
| 17,685 | ||
TOTAL INFORMATION TECHNOLOGY | 46,767 | ||
TELECOMMUNICATION SERVICES - 4.8% | |||
Diversified Telecommunication Services - 4.8% | |||
Level 3 Communications, Inc. (a) | 2,181,015 | 121,003 | |
TOTAL COMMON STOCKS (Cost $613,404) |
| ||
Convertible Preferred Stocks - 26.3% | |||
|
|
|
|
CONSUMER STAPLES - 3.4% | |||
Food Products - 3.4% | |||
Bunge Ltd. 4.875% (a) | 237,000 | 26,470 | |
Post Holdings, Inc.: | |||
3.75% (a)(e) | 100,000 | 10,053 | |
Series C, 2.50% (a)(e) | 100,000 | 8,700 | |
Tyson Foods, Inc. 4.75% (a) | 800,000 | 41,576 | |
| 86,799 | ||
Convertible Preferred Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - 1.6% | |||
Oil, Gas & Consumable Fuels - 1.6% | |||
Chesapeake Energy Corp. Series A, 5.75% (e) | 50,700 | $ 41,447 | |
FINANCIALS - 11.2% | |||
Banks - 10.1% | |||
Bank of America Corp. Series L, 7.25% | 74,135 | 84,922 | |
Huntington Bancshares, Inc. 8.50% (a) | 2,100 | 2,825 | |
Wells Fargo & Co. 7.50% | 137,632 | 166,369 | |
| 254,116 | ||
Real Estate Investment Trusts - 1.1% | |||
American Tower Corp. Series A, 5.25% (a) | 50,100 | 5,153 | |
Crown Castle International Corp. 4.50% | 72,900 | 7,498 | |
Weyerhaeuser Co. Series A, 6.375% | 271,200 | 14,704 | |
| 27,355 | ||
TOTAL FINANCIALS | 281,471 | ||
HEALTH CARE - 6.0% | |||
Health Care Providers & Services - 1.5% | |||
Anthem, Inc. 5.25% (a) | 712,000 | 38,035 | |
Pharmaceuticals - 4.5% | |||
Actavis PLC 5.50% | 105,500 | 111,827 | |
TOTAL HEALTH CARE | 149,862 | ||
INDUSTRIALS - 0.7% | |||
Aerospace & Defense - 0.1% | |||
United Technologies Corp. 7.50% | 45,700 | 2,784 | |
Road & Rail - 0.6% | |||
Genesee & Wyoming, Inc. 5.00% (a) | 137,000 | 14,545 | |
TOTAL INDUSTRIALS | 17,329 | ||
MATERIALS - 1.1% | |||
Metals & Mining - 1.1% | |||
Alcoa, Inc. Series 1, 5.375% (a) | 400,000 | 17,536 | |
ArcelorMittal SA 6.00% (a) | 568,500 | 9,842 | |
| 27,378 | ||
TELECOMMUNICATION SERVICES - 1.1% | |||
Wireless Telecommunication Services - 1.1% | |||
T-Mobile U.S., Inc. Series A 5.50% (a) | 397,500 | 27,336 | |
Convertible Preferred Stocks - continued | |||
Shares | Value (000s) | ||
UTILITIES - 1.2% | |||
Electric Utilities - 0.3% | |||
Exelon Corp. 6.50% | 171,500 | $ 8,285 | |
Independent Power and Renewable Electricity Producers - 0.9% | |||
Dynegy, Inc. 5.375% (a) | 200,000 | 22,396 | |
TOTAL UTILITIES | 30,681 | ||
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $629,973) |
| ||
Money Market Funds - 4.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.15% (b) | 123,247,589 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $2,138,418) | 2,509,976 | ||
NET OTHER ASSETS (LIABILITIES) - 0.4% | 10,549 | ||
NET ASSETS - 100% | $ 2,520,525 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(c) Non-income producing - Security is in default. |
(d) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $288,948,000 or 11.5% of net assets. |
(f) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $12,000 or 0.0% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Houghton Mifflin Harcourt Co. warrants 6/22/19 | 6/22/12 | $ 1 |
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 | $ 160 |
Fidelity Securities Lending Cash Central Fund | 0* |
Total | $ 160 |
* Amount represents one hundred and twenty nine dollars. |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 363,751 | $ 363,739 | $ 12 | $ - |
Consumer Staples | 86,799 | 41,576 | 45,223 | - |
Energy | 75,415 | 33,968 | 41,447 | - |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Financials | $ 384,315 | $ 369,611 | $ 14,704 | $ - |
Health Care | 203,124 | 165,089 | 38,035 | - |
Industrials | 161,188 | 146,643 | 14,545 | - |
Information Technology | 46,767 | 46,767 | - | - |
Materials | 27,378 | 17,536 | 9,842 | - |
Telecommunication Services | 148,339 | 148,339 | - | - |
Utilities | 30,681 | 30,681 | - | - |
Corporate Bonds | 858,971 | - | 858,971 | - |
Money Market Funds | 123,248 | 123,248 | - | - |
Total Investments in Securities: | $ 2,509,976 | $ 1,487,197 | $ 1,022,779 | $ - |
The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited): |
BBB | 2.8% |
BB | 11.9% |
B | 2.1% |
CCC,CC,C | 5.4% |
Not Rated | 11.9% |
Equities | 60.6% |
Short-Term Investments and Net Other Assets | 5.3% |
| 100.0% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. |
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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $2,015,170) | $ 2,386,728 |
|
Fidelity Central Funds (cost $123,248) | 123,248 |
|
Total Investments (cost $2,138,418) |
| $ 2,509,976 |
Receivable for fund shares sold | 1,157 | |
Dividends receivable | 6,112 | |
Interest receivable | 6,799 | |
Distributions receivable from Fidelity Central Funds | 21 | |
Prepaid expenses | 1 | |
Other receivables | 6 | |
Total assets | 2,524,072 | |
|
|
|
Liabilities | ||
Payable for fund shares redeemed | $ 2,323 | |
Accrued management fee | 694 | |
Transfer agent fee payable | 348 | |
Distribution and service plan fees payable | 68 | |
Other affiliated payables | 65 | |
Other payables and accrued expenses | 49 | |
Total liabilities | 3,547 | |
|
|
|
Net Assets | $ 2,520,525 | |
Net Assets consist of: |
| |
Paid in capital | $ 2,071,780 | |
Undistributed net investment income | 15,586 | |
Accumulated undistributed net realized gain (loss) on investments | 61,601 | |
Net unrealized appreciation (depreciation) on investments | 371,558 | |
Net Assets | $ 2,520,525 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 32.26 | |
|
|
|
Maximum offering price per share (100/94.25 of $32.26) | $ 34.23 | |
Class T: | $ 32.26 | |
|
|
|
Maximum offering price per share (100/96.50 of $32.26) | $ 33.43 | |
Class B: | $ 32.21 | |
|
|
|
Class C: | $ 32.05 | |
|
|
|
|
|
|
Convertible Securities: | $ 32.38 | |
|
|
|
Institutional Class: | $ 32.33 |
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
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 20,917 |
Interest |
| 12,880 |
Income from Fidelity Central Funds |
| 160 |
Total income |
| 33,957 |
|
|
|
Expenses | ||
Management fee | $ 5,846 | |
Performance adjustment | (801) | |
Transfer agent fees | 2,121 | |
Distribution and service plan fees | 435 | |
Accounting and security lending fees | 387 | |
Custodian fees and expenses | 15 | |
Independent trustees' compensation | 6 | |
Registration fees | 109 | |
Audit | 37 | |
Legal | 23 | |
Miscellaneous | 10 | |
Total expenses before reductions | 8,188 | |
Expense reductions | (2) | 8,186 |
Net investment income (loss) | 25,771 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers |
| 97,062 |
Change in net unrealized appreciation (depreciation) on investment securities | (103,444) | |
Net gain (loss) | (6,382) | |
Net increase (decrease) in net assets resulting from operations | $ 19,389 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 25,771 | $ 47,314 |
Net realized gain (loss) | 97,062 | 128,507 |
Change in net unrealized appreciation (depreciation) | (103,444) | 87,394 |
Net increase (decrease) in net assets resulting | 19,389 | 263,215 |
Distributions to shareholders from net investment income | (24,294) | (43,691) |
Distributions to shareholders from net realized gain | (87,333) | (16,252) |
Total distributions | (111,627) | (59,943) |
Share transactions - net increase (decrease) | (66,118) | 121,737 |
Total increase (decrease) in net assets | (158,356) | 325,009 |
|
|
|
Net Assets | ||
Beginning of period | 2,678,881 | 2,353,872 |
End of period (including undistributed net investment income of $15,586 and undistributed net investment income of $14,109, respectively) | $ 2,520,525 | $ 2,678,881 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.42 | $ 30.79 | $ 25.08 | $ 22.85 | $ 24.22 | $ 21.25 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .28 | .51 | .57 | .68 | .72 | .75 |
Net realized and unrealized gain (loss) | (.08) | 2.81I | 5.88 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .20 | 3.32 | 6.45 | 2.90 | (.62) | 3.76 |
Distributions from net investment income | (.26) | (.48) | (.74) | (.67) | (.75) | (.79) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.36) | (.69) | (.74) | (.67) | (.75) | (.79) |
Net asset value, end of period | $ 32.26 | $ 33.42 | $ 30.79 | $ 25.08 | $ 22.85 | $ 24.22 |
Total ReturnB, C, D | .72% | 10.95% I | 26.12% | 12.87% | (2.79)% | 18.05% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | .87%A | .86% | .99% | 1.04% | .88% | .87% |
Expenses net of fee waivers, if any | .87%A | .85% | .99% | 1.04% | .88% | .87% |
Expenses net of all reductions | .87%A | .85% | .99% | 1.04% | .88% | .87% |
Net investment income (loss) | 1.74% A | 1.60% | 1.99% | 2.79% | 2.84% | 3.29% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 81 | $ 150 | $ 113 | $ 26 | $ 33 | $ 19 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the sales charges. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.58%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.44 | $ 30.80 | $ 25.09 | $ 22.87 | $ 24.23 | $ 21.25 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .24 | .42 | .48 | .60 | .65 | .69 |
Net realized and unrealized gain (loss) | (.10) | 2.82I | 5.89 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .14 | 3.24 | 6.37 | 2.82 | (.69) | 3.70 |
Distributions from net investment income | (.22) | (.39) | (.66) | (.60) | (.67) | (.72) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.32) | (.60) | (.66) | (.60) | (.67) | (.72) |
Net asset value, end of period | $ 32.26 | $ 33.44 | $ 30.80 | $ 25.09 | $ 22.87 | $ 24.23 |
Total ReturnB, C, D | .54% | 10.67%I | 25.73% | 12.48% | (3.07)% | 17.74% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.15%A | 1.14% | 1.30% | 1.36% | 1.18% | 1.13% |
Expenses net of fee waivers, if any | 1.15%A | 1.14% | 1.30% | 1.36% | 1.18% | 1.13% |
Expenses net of all reductions | 1.15%A | 1.14% | 1.30% | 1.36% | 1.17% | 1.13% |
Net investment income (loss) | 1.46% A | 1.32% | 1.68% | 2.47% | 2.55% | 3.03% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 13 | $ 14 | $ 11 | $ 4 | $ 5 | $ 4 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the sales charges. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.30%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.37 | $ 30.74 | $ 25.04 | $ 22.82 | $ 24.17 | $ 21.22 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .15 | .25 | .32 | .47 | .51 | .56 |
Net realized and unrealized gain (loss) | (.09) | 2.81I | 5.89 | 2.22 | (1.34) | 3.01 |
Total from investment operations | .06 | 3.06 | 6.21 | 2.69 | (.83) | 3.57 |
Distributions from net investment income | (.12) | (.22) | (.51) | (.47) | (.52) | (.62) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.22) | (.43) | (.51) | (.47) | (.52) | (.62) |
Net asset value, end of period | $ 32.21 | $ 33.37 | $ 30.74 | $ 25.04 | $ 22.82 | $ 24.17 |
Total ReturnB, C, D | .29% | 10.05%I | 25.05% | 11.91% | (3.59)% | 17.08% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Expenses net of fee waivers, if any | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Expenses net of all reductions | 1.65%A | 1.69% | 1.83% | 1.88% | 1.73% | 1.69% |
Net investment income (loss) | .95%A | .77% | 1.15% | 1.95% | 2.00% | 2.47% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 9.68%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.23 | $ 30.63 | $ 24.97 | $ 22.75 | $ 24.14 | $ 21.20 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) E | .16 | .27 | .34 | .49 | .51 | .56 |
Net realized and unrealized gain (loss) | (.09) | 2.80I | 5.87 | 2.22 | (1.33) | 3.01 |
Total from investment operations | .07 | 3.07 | 6.21 | 2.71 | (.82) | 3.57 |
Distributions from net investment income | (.15) | (.26) | (.55) | (.49) | (.57) | (.63) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.25) | (.47) | (.55) | (.49) | (.57) | (.63) |
Net asset value, end of period | $ 32.05 | $ 33.23 | $ 30.63 | $ 24.97 | $ 22.75 | $ 24.14 |
Total ReturnB, C, D | .32% | 10.13%I | 25.12% | 12.01% | (3.57)% | 17.13% |
Ratios to Average Net Assets F, H |
|
|
|
|
| |
Expenses before reductions | 1.63%A | 1.62% | 1.78% | 1.82% | 1.67% | 1.66% |
Expenses net of fee waivers, if any | 1.63%A | 1.62% | 1.77% | 1.82% | 1.67% | 1.66% |
Expenses net of all reductions | 1.63%A | 1.62% | 1.77% | 1.82% | 1.67% | 1.66% |
Net investment income (loss) | .98%A | .84% | 1.20% | 2.01% | 2.06% | 2.50% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 50 | $ 48 | $ 28 | $ 12 | $ 13 | $ 5 |
Portfolio turnover rateG | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. FFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. INet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 9.76%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Convertible Securities
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.56 | $ 30.90 | $ 25.16 | $ 22.92 | $ 24.29 | $ 21.30 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .33 | .60 | .64 | .75 | .79 | .81 |
Net realized and unrealized gain (loss) | (.10) | 2.83 H | 5.91 | 2.23 | (1.35) | 3.02 |
Total from investment operations | .23 | 3.43 | 6.55 | 2.98 | (.56) | 3.83 |
Distributions from net investment income | (.31) | (.56) | (.81) | (.74) | (.81) | (.84) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.41) | (.77) | (.81) | (.74) | (.81) | (.84) |
Net asset value, end of period | $ 32.38 | $ 33.56 | $ 30.90 | $ 25.16 | $ 22.92 | $ 24.29 |
Total ReturnB, C | .82% | 11.28% H | 26.44% | 13.20% | (2.54)% | 18.37% |
Ratios to Average Net Assets E, G |
|
|
|
|
| |
Expenses before reductions | .59%A | .58% | .73% | .76% | .61% | .59% |
Expenses net of fee waivers, if any | .59%A | .58% | .72% | .76% | .61% | .59% |
Expenses net of all reductions | .59%A | .58% | .72% | .76% | .61% | .59% |
Net investment income (loss) | 2.01%A | 1.88% | 2.26% | 3.07% | 3.12% | 3.57% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 2,172 | $ 2,307 | $ 2,109 | $ 1,733 | $ 1,904 | $ 2,287 |
Portfolio turnover rateF | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. HNet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.91%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 33.51 | $ 30.86 | $ 25.13 | $ 22.90 | $ 24.27 | $ 21.29 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .32 | .59 | .64 | .74 | .77 | .80 |
Net realized and unrealized gain (loss) | (.09) | 2.83 H | 5.89 | 2.22 | (1.33) | 3.02 |
Total from investment operations | .23 | 3.42 | 6.53 | 2.96 | (.56) | 3.82 |
Distributions from net investment income | (.31) | (.56) | (.80) | (.73) | (.81) | (.84) |
Distributions from net realized gain | (1.10) | (.21) | - | - | - | - |
Total distributions | (1.41) | (.77) | (.80) | (.73) | (.81) | (.84) |
Net asset value, end of period | $ 32.33 | $ 33.51 | $ 30.86 | $ 25.13 | $ 22.90 | $ 24.27 |
Total ReturnB, C | .82% | 11.25% H | 26.42% | 13.11% | (2.55)% | 18.34% |
Ratios to Average Net Assets E, G |
|
|
|
|
| |
Expenses before reductions | .61%A | .61% | .76% | .80% | .65% | .60% |
Expenses net of fee waivers, if any | .61%A | .61% | .76% | .80% | .65% | .60% |
Expenses net of all reductions | .61%A | .61% | .76% | .80% | .65% | .60% |
Net investment income (loss) | 1.99%A | 1.85% | 2.22% | 3.03% | 3.07% | 3.56% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 204 | $ 159 | $ 92 | $ 14 | $ 23 | $ 6 |
Portfolio turnover rateF | 26% A | 23% | 22% | 20% | 24% | 28% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. HNet realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.12 per share. Excluding these litigation proceeds, the total return would have been 10.88%. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Convertible Securities Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Convertible Securities and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
During the period, the Board of Trustees approved a change in the name of Institutional Class to Class I effective July 1, 2015.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015, is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, contingent interest, equity-debt classifications, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales, and certain conversion ratio adjustments.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 509,956 |
Gross unrealized depreciation | (148,026) |
Net unrealized appreciation (depreciation) on securities | $ 361,930 |
|
|
Tax cost | $ 2,148,046 |
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $317,263 and $302,068, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
5. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Convertible Securities as compared to its benchmark index, the BofA Merrill LynchSM All US Convertibles Index, over the same 36 month performance period. For the reporting period, the total annualized management fee rate, including the performance adjustment, was .39% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 151 | $ 6 |
Class T | .25% | .25% | 34 | -* |
Class B | .75% | .25% | 6 | 4 |
Class C | .75% | .25% | 244 | 79 |
|
|
| $ 435 | $ 89 |
* Amount represents three hundred and twelve dollars.
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 20 |
Class T | 3 |
Class B* | 1 |
Class C* | 7 |
| $ 31 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 111 | .18 |
Class T | 15 | .22 |
Class B | 1 | .22 |
Class C | 48 | .19 |
Convertible Securities | 1,780 | .16 |
Institutional Class | 166 | .18 |
| $ 2,121 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
5. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were two hundred and seventy eight dollars for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to one hundred and twenty nine dollars. During the period, there were no securities loaned to FCM.
Semiannual Report
8. Expense Reductions.
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 two hundred and fifty five dollars.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Convertible Securities expenses during the period in the amount of $2.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Class A | $ 1,034 | $ 2,203 |
Class T | 93 | 157 |
Class B | 5 | 10 |
Class C | 219 | 315 |
Convertible Securities | 21,330 | 38,782 |
Institutional Class | 1,613 | 2,224 |
Total | $ 24,294 | $ 43,691 |
From net realized gain |
|
|
Class A | $ 4,752 | $ 831 |
Class T | 461 | 77 |
Class B | 44 | 9 |
Class C | 1,591 | 204 |
Convertible Securities | 75,279 | 14,428 |
Institutional Class | 5,206 | 703 |
Total | $ 87,333 | $ 16,252 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Class A |
|
|
|
|
Shares sold | 1,097 | 5,975 | $ 35,523 | $ 193,445 |
Reinvestment of distributions | 176 | 50 | 5,520 | 1,587 |
Shares redeemed | (3,269) | (5,200) | (105,443) | (165,097) |
Net increase (decrease) | (1,996) | 825 | $ (64,400) | $ 29,935 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
10. Share Transactions - continued
| Shares | Dollars | ||
| Six months ended | Year ended | Six months ended | Year ended |
Class T |
|
|
|
|
Shares sold | 47 | 223 | $ 1,528 | $ 7,085 |
Reinvestment of distributions | 17 | 7 | 541 | 220 |
Shares redeemed | (85) | (156) | (2,753) | (5,011) |
Net increase (decrease) | (21) | 74 | $ (684) | $ 2,294 |
Class B |
|
|
|
|
Shares sold | 2 | 11 | $ 7 | $ 355 |
Reinvestment of distributions | 1 | 1 | 46 | 16 |
Shares redeemed | (14) | (16) | (436) | (489) |
Net increase (decrease) | (11) | (4) | $ (383) | $ (118) |
Class C |
|
|
|
|
Shares sold | 245 | 787 | $ 7,880 | $ 24,989 |
Reinvestment of distributions | 50 | 13 | 1,571 | 415 |
Shares redeemed | (160) | (285) | (5,122) | (9,080) |
Net increase (decrease) | 135 | 515 | $ 4,329 | $ 16,324 |
Convertible Securities |
|
|
|
|
Shares sold | 3,932 | 12,162 | $ 127,521 | $ 390,632 |
Reinvestment of distributions | 2,706 | 1,483 | 85,360 | 46,826 |
Shares redeemed | (8,319) | (13,141) | (269,411) | (422,086) |
Net increase (decrease) | (1,681) | 504 | $ (56,530) | $ 15,372 |
Institutional Class |
|
|
|
|
Shares sold | 2,962 | 4,834 | $ 96,064 | $ 155,094 |
Reinvestment of distributions | 171 | 73 | 5,382 | 2,295 |
Shares redeemed | (1,543) | (3,158) | (49,896) | (99,459) |
Net increase (decrease) | 1,590 | 1,749 | $ 51,550 | $ 57,930 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research (Hong Kong) Limited
Fidelity Management & Research (Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
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®)
1-800-544-5555
Automated line for quickest service
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com
CVS-USAN-0715 1.786810.112
Fidelity®
Equity Dividend Income
Fund -
Class K
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-835-5092 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
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 (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
Shareholder Expense Example - continued
| Annualized | Beginning | Ending | Expenses Paid |
Equity Dividend Income | .63% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,016.10 | $ 3.17 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.79 | $ 3.18 |
Class K | .52% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,016.60 | $ 2.61 |
HypotheticalA |
| $ 1,000.00 | $ 1,022.34 | $ 2.62 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
JPMorgan Chase & Co. | 3.8 | 3.4 |
General Electric Co. | 3.5 | 3.3 |
Johnson & Johnson | 3.4 | 3.3 |
Wells Fargo & Co. | 3.3 | 3.2 |
Chevron Corp. | 3.0 | 3.5 |
Procter & Gamble Co. | 2.5 | 2.7 |
Exxon Mobil Corp. | 2.4 | 3.7 |
Pfizer, Inc. | 2.3 | 1.3 |
Medtronic PLC | 2.2 | 1.9 |
AT&T, Inc. | 2.1 | 0.3 |
| 28.5 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Financials | 26.6 | 25.7 |
Health Care | 13.8 | 13.4 |
Information Technology | 11.8 | 10.7 |
Energy | 11.2 | 11.8 |
Consumer Staples | 10.8 | 11.5 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015* | As of November 30, 2014** | ||||||
Stocks 96.8% |
| Stocks 98.5% |
| ||||
Other Investments 0.0%† |
| Other Investments 0.1% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 12.6% |
| ** Foreign investments | 12.1% |
|
†Amount represents less than 0.1% |
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.8% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 7.4% | |||
Automobiles - 1.7% | |||
Ford Motor Co. | 3,313,300 | $ 50,263 | |
General Motors Co. | 1,231,900 | 44,311 | |
| 94,574 | ||
Hotels, Restaurants & Leisure - 1.5% | |||
Darden Restaurants, Inc. | 327,600 | 21,471 | |
DineEquity, Inc. | 159,000 | 15,518 | |
Wyndham Worldwide Corp. | 387,800 | 32,928 | |
Yum! Brands, Inc. | 161,300 | 14,535 | |
| 84,452 | ||
Media - 0.3% | |||
ITV PLC | 3,209,300 | 13,357 | |
Stingray Digital Group, Inc. | 27,900 | 140 | |
| 13,497 | ||
Multiline Retail - 1.5% | |||
Target Corp. | 1,019,200 | 80,843 | |
Specialty Retail - 1.2% | |||
Foot Locker, Inc. | 462,500 | 29,230 | |
Home Depot, Inc. | 184,500 | 20,557 | |
L Brands, Inc. | 78,100 | 6,757 | |
Staples, Inc. | 664,600 | 10,943 | |
| 67,487 | ||
Textiles, Apparel & Luxury Goods - 1.2% | |||
Coach, Inc. | 192,493 | 6,808 | |
Japan Tobacco, Inc. | 748,700 | 27,170 | |
VF Corp. | 457,800 | 32,243 | |
| 66,221 | ||
TOTAL CONSUMER DISCRETIONARY | 407,074 | ||
CONSUMER STAPLES - 10.8% | |||
Beverages - 2.2% | |||
Anheuser-Busch InBev SA NV ADR | 263,700 | 31,792 | |
Constellation Brands, Inc. Class A (sub. vtg.) | 123,300 | 14,536 | |
Molson Coors Brewing Co. Class B | 341,400 | 25,052 | |
SABMiller PLC | 248,700 | 13,281 | |
The Coca-Cola Co. | 870,300 | 35,647 | |
| 120,308 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
CONSUMER STAPLES - continued | |||
Food & Staples Retailing - 2.2% | |||
CVS Health Corp. | 890,300 | $ 91,149 | |
Walgreens Boots Alliance, Inc. | 371,400 | 31,881 | |
| 123,030 | ||
Food Products - 1.4% | |||
ConAgra Foods, Inc. | 1,124,200 | 43,405 | |
General Mills, Inc. | 206,000 | 11,567 | |
Kellogg Co. | 359,100 | 22,541 | |
| 77,513 | ||
Household Products - 3.3% | |||
Energizer Holdings, Inc. | 149,900 | 21,239 | |
Procter & Gamble Co. | 1,727,705 | 135,435 | |
Reckitt Benckiser Group PLC | 276,800 | 24,999 | |
| 181,673 | ||
Personal Products - 0.4% | |||
Estee Lauder Companies, Inc. Class A | 240,300 | 21,009 | |
Tobacco - 1.3% | |||
Altria Group, Inc. | 515,200 | 26,378 | |
Philip Morris International, Inc. | 144,900 | 12,037 | |
Reynolds American, Inc. | 300,400 | 23,056 | |
Universal Corp. | 144,676 | 7,449 | |
| 68,920 | ||
TOTAL CONSUMER STAPLES | 592,453 | ||
ENERGY - 11.2% | |||
Energy Equipment & Services - 0.2% | |||
Frank's International NV | 638,600 | 12,657 | |
Oil, Gas & Consumable Fuels - 11.0% | |||
Anadarko Petroleum Corp. | 350,100 | 29,272 | |
Chevron Corp. | 1,611,770 | 166,012 | |
Energy Transfer Equity LP | 431,200 | 29,611 | |
Enterprise Products Partners LP | 1,148,800 | 37,244 | |
Enviva Partners LP | 240,100 | 4,888 | |
Exxon Mobil Corp. | 1,562,756 | 133,147 | |
Husky Energy, Inc. | 1,265,000 | 24,861 | |
Kinder Morgan, Inc. | 1,352,400 | 56,111 | |
Markwest Energy Partners LP | 257,800 | 16,662 | |
Plains GP Holdings LP Class A | 803,900 | 22,477 | |
Suncor Energy, Inc. (c) | 1,603,300 | 46,864 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Western Gas Partners LP | 237,300 | $ 16,255 | |
Williams Partners LP | 352,794 | 19,714 | |
| 603,118 | ||
TOTAL ENERGY | 615,775 | ||
FINANCIALS - 26.6% | |||
Banks - 12.6% | |||
Bank of America Corp. | 2,257,700 | 37,252 | |
Community Trust Bancorp, Inc. | 302,720 | 9,920 | |
CVB Financial Corp. | 792,300 | 12,994 | |
JPMorgan Chase & Co. | 3,169,322 | 208,478 | |
Nordea Bank AB | 1,200,000 | 15,608 | |
PacWest Bancorp | 432,488 | 19,414 | |
Prosperity Bancshares, Inc. | 229,800 | 12,310 | |
Regions Financial Corp. | 3,278,400 | 33,079 | |
SunTrust Banks, Inc. | 530,600 | 22,646 | |
Svenska Handelsbanken AB (A Shares) (c) | 1,187,100 | 17,876 | |
U.S. Bancorp | 2,451,000 | 105,663 | |
Valley National Bancorp (c) | 1,229,800 | 12,027 | |
Wells Fargo & Co. | 3,271,808 | 183,090 | |
| 690,357 | ||
Capital Markets - 4.2% | |||
Ares Capital Corp. | 1,250,400 | 20,944 | |
BlackRock, Inc. Class A | 196,000 | 71,693 | |
KKR & Co. LP | 1,318,800 | 30,266 | |
The Blackstone Group LP | 2,515,200 | 110,166 | |
| 233,069 | ||
Consumer Finance - 1.2% | |||
Capital One Financial Corp. | 777,800 | 64,993 | |
Insurance - 5.7% | |||
ACE Ltd. | 695,500 | 74,057 | |
Allied World Assurance Co. | 345,300 | 14,672 | |
First American Financial Corp. | 801,800 | 28,632 | |
MetLife, Inc. | 1,170,529 | 61,172 | |
Principal Financial Group, Inc. | 745,700 | 38,545 | |
The Chubb Corp. | 628,808 | 61,309 | |
The Travelers Companies, Inc. | 367,200 | 37,131 | |
| 315,518 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
FINANCIALS - continued | |||
Real Estate Investment Trusts - 2.9% | |||
HCP, Inc. | 932,000 | $ 36,087 | |
Liberty Property Trust (SBI) | 462,100 | 16,146 | |
Simon Property Group, Inc. | 110,200 | 19,990 | |
UDR, Inc. | 612,900 | 19,956 | |
Urban Edge Properties | 493,200 | 10,653 | |
Weyerhaeuser Co. | 833,239 | 27,130 | |
WP Carey, Inc. | 451,300 | 28,743 | |
| 158,705 | ||
TOTAL FINANCIALS | 1,462,642 | ||
HEALTH CARE - 13.8% | |||
Biotechnology - 0.5% | |||
Amgen, Inc. | 190,700 | 29,799 | |
Health Care Equipment & Supplies - 2.8% | |||
Becton, Dickinson & Co. | 248,500 | 34,917 | |
Medtronic PLC | 1,570,564 | 119,865 | |
| 154,782 | ||
Pharmaceuticals - 10.5% | |||
AbbVie, Inc. | 869,000 | 57,867 | |
Bristol-Myers Squibb Co. | 444,800 | 28,734 | |
Eli Lilly & Co. | 790,500 | 62,370 | |
Johnson & Johnson | 1,864,366 | 186,698 | |
Pfizer, Inc. | 3,677,035 | 127,777 | |
Sanofi SA sponsored ADR | 1,119,900 | 55,334 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 952,900 | 57,269 | |
| 576,049 | ||
TOTAL HEALTH CARE | 760,630 | ||
INDUSTRIALS - 7.6% | |||
Aerospace & Defense - 2.0% | |||
The Boeing Co. | 112,800 | 15,851 | |
United Technologies Corp. | 821,330 | 96,235 | |
| 112,086 | ||
Air Freight & Logistics - 0.7% | |||
United Parcel Service, Inc. Class B | 369,700 | 36,682 | |
Airlines - 0.2% | |||
Copa Holdings SA Class A | 106,000 | 9,041 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - continued | |||
Electrical Equipment - 0.7% | |||
Eaton Corp. PLC | 524,500 | $ 37,549 | |
Industrial Conglomerates - 3.8% | |||
3M Co. | 102,700 | 16,338 | |
General Electric Co. | 6,996,997 | 190,808 | |
| 207,146 | ||
Machinery - 0.2% | |||
Deere & Co. | 143,400 | 13,434 | |
TOTAL INDUSTRIALS | 415,938 | ||
INFORMATION TECHNOLOGY - 11.8% | |||
Communications Equipment - 1.7% | |||
Cisco Systems, Inc. | 2,562,600 | 75,110 | |
QUALCOMM, Inc. | 308,500 | 21,496 | |
| 96,606 | ||
Electronic Equipment & Components - 0.2% | |||
TE Connectivity Ltd. | 199,200 | 13,745 | |
IT Services - 3.5% | |||
Accenture PLC Class A | 290,100 | 27,861 | |
Fidelity National Information Services, Inc. | 846,500 | 53,076 | |
IBM Corp. | 382,800 | 64,942 | |
Paychex, Inc. | 930,000 | 45,951 | |
| 191,830 | ||
Semiconductors & Semiconductor Equipment - 1.2% | |||
Cypress Semiconductor Corp. | 864,700 | 11,872 | |
Intel Corp. | 803,500 | 27,689 | |
Maxim Integrated Products, Inc. | 691,700 | 24,258 | |
| 63,819 | ||
Software - 2.6% | |||
Microsoft Corp. | 2,012,626 | 94,312 | |
Oracle Corp. | 810,200 | 35,236 | |
Symantec Corp. | 452,500 | 11,143 | |
| 140,691 | ||
Technology Hardware, Storage & Peripherals - 2.6% | |||
Apple, Inc. | 345,200 | 44,973 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Technology Hardware, Storage & Peripherals - continued | |||
EMC Corp. | 1,982,755 | $ 52,226 | |
Hewlett-Packard Co. | 1,445,800 | 48,290 | |
| 145,489 | ||
TOTAL INFORMATION TECHNOLOGY | 652,180 | ||
MATERIALS - 1.4% | |||
Chemicals - 1.4% | |||
E.I. du Pont de Nemours & Co. | 358,400 | 25,450 | |
LyondellBasell Industries NV Class A | 258,700 | 26,155 | |
Potash Corp. of Saskatchewan, Inc. | 758,100 | 23,860 | |
| 75,465 | ||
TELECOMMUNICATION SERVICES - 2.1% | |||
Diversified Telecommunication Services - 2.1% | |||
AT&T, Inc. | 3,347,400 | 115,619 | |
UTILITIES - 4.1% | |||
Electric Utilities - 3.6% | |||
American Electric Power Co., Inc. | 727,077 | 40,927 | |
Exelon Corp. | 744,900 | 25,200 | |
IDACORP, Inc. | 490,600 | 29,176 | |
PPL Corp. | 1,527,400 | 53,016 | |
Xcel Energy, Inc. | 1,510,700 | 51,439 | |
| 199,758 | ||
Multi-Utilities - 0.5% | |||
CMS Energy Corp. | 814,500 | 27,807 | |
TOTAL UTILITIES | 227,565 | ||
TOTAL COMMON STOCKS (Cost $4,584,135) |
|
Preferred Securities - 0.0% | ||||
| Principal | Value (000s) | ||
FINANCIALS - 0.0% | ||||
Diversified Financial Services - 0.0% | ||||
Baggot Securities Ltd. 10.24% (d)(e) (Cost $3,348) | EUR | 2,180 | $ 2,581 |
Money Market Funds - 4.5% | |||
Shares |
| ||
Fidelity Cash Central Fund, 0.15% (a) | 192,975,699 | 192,976 | |
Fidelity Securities Lending Cash Central Fund, 0.16% (a)(b) | 56,391,948 | 56,392 | |
TOTAL MONEY MARKET FUNDS (Cost $249,368) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $4,836,851) | 5,577,290 | ||
NET OTHER ASSETS (LIABILITIES) - (1.3)% | (73,952) | ||
NET ASSETS - 100% | $ 5,503,338 |
Currency Abbreviations | ||
EUR | - | European Monetary Unit |
Legend |
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(b) Investment made with cash collateral received from securities on loan. |
(c) Security or a portion of the security is on loan at period end. |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $2,581,000 or 0.0% of net assets. |
(e) Security is perpetual in nature with no stated maturity date. |
(f) Amount is stated in United States dollars unless otherwise noted. |
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 | $ 95 |
Fidelity Securities Lending Cash Central Fund | 222 |
Total | $ 317 |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 407,074 | $ 379,764 | $ 27,310 | $ - |
Consumer Staples | 592,453 | 567,454 | 24,999 | - |
Energy | 615,775 | 615,775 | - | - |
Financials | 1,462,642 | 1,462,642 | - | - |
Health Care | 760,630 | 760,630 | - | - |
Industrials | 415,938 | 415,938 | - | - |
Information Technology | 652,180 | 652,180 | - | - |
Materials | 75,465 | 75,465 | - | - |
Telecommunication Services | 115,619 | 115,619 | - | - |
Utilities | 227,565 | 227,565 | - | - |
Preferred Securities | 2,581 | - | 2,581 | - |
Money Market Funds | 249,368 | 249,368 | - | - |
Total Investments in Securities: | $ 5,577,290 | $ 5,522,400 | $ 54,890 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 87.4% |
Ireland | 3.4% |
Switzerland | 1.8% |
Canada | 1.8% |
Israel | 1.1% |
France | 1.0% |
Others (Individually Less Than 1%) | 3.5% |
| 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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $53,736) - See accompanying schedule: Unaffiliated issuers (cost $4,587,483) | $ 5,327,922 |
|
Fidelity Central Funds (cost $249,368) | 249,368 |
|
Total Investments (cost $4,836,851) |
| $ 5,577,290 |
Foreign currency held at value (cost $803) | 803 | |
Receivable for fund shares sold | 585 | |
Dividends receivable | 16,446 | |
Distributions receivable from Fidelity Central Funds | 28 | |
Prepaid expenses | 2 | |
Other receivables | 445 | |
Total assets | 5,595,599 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 27,822 | |
Payable for fund shares redeemed | 4,768 | |
Accrued management fee | 2,070 | |
Other affiliated payables | 768 | |
Other payables and accrued expenses | 441 | |
Collateral on securities loaned, at value | 56,392 | |
Total liabilities | 92,261 | |
|
|
|
Net Assets | $ 5,503,338 | |
Net Assets consist of: |
| |
Paid in capital | $ 4,534,718 | |
Undistributed net investment income | 32,042 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 196,183 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 740,395 | |
Net Assets | $ 5,503,338 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Equity Dividend Income: | $ 27.03 | |
|
|
|
Class K: | $ 27.03 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands Six months ended May 31, 2015 (Unaudited) | ||
|
|
|
Investment Income |
|
|
Dividends |
| $ 85,067 |
Interest |
| 20 |
Income from Fidelity Central Funds |
| 317 |
Total income |
| 85,404 |
|
|
|
Expenses | ||
Management fee | $ 12,445 | |
Transfer agent fees | 4,049 | |
Accounting and security lending fees | 556 | |
Custodian fees and expenses | 42 | |
Independent trustees' compensation | 12 | |
Registration fees | 45 | |
Audit | 34 | |
Legal | 11 | |
Miscellaneous | 22 | |
Total expenses before reductions | 17,216 | |
Expense reductions | (124) | 17,092 |
Net investment income (loss) | 68,312 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 190,708 | |
Foreign currency transactions | (1,429) | |
Total net realized gain (loss) |
| 189,279 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (168,819) | |
Assets and liabilities in foreign currencies | 73 | |
Total change in net unrealized appreciation (depreciation) |
| (168,746) |
Net gain (loss) | 20,533 | |
Net increase (decrease) in net assets resulting from operations | $ 88,845 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 68,312 | $ 151,941 |
Net realized gain (loss) | 189,279 | 519,620 |
Change in net unrealized appreciation (depreciation) | (168,746) | 73,900 |
Net increase (decrease) in net assets resulting | 88,845 | 745,461 |
Distributions to shareholders from net investment income | (61,653) | (136,939) |
Distributions to shareholders from net realized gain | (17,510) | - |
Total distributions | (79,163) | (136,939) |
Share transactions - net increase (decrease) | (153,704) | (395,348) |
Total increase (decrease) in net assets | (144,022) | 213,174 |
|
|
|
Net Assets | ||
Beginning of period | 5,647,360 | 5,434,186 |
End of period (including undistributed net investment income of $32,042 and undistributed net investment income of $25,383, respectively) | $ 5,503,338 | $ 5,647,360 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Equity Dividend Income
| Six months ended | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
| |
Net asset value, beginning of period | $ 26.99 | $ 24.15 | $ 19.54 | $ 17.03 | $ 16.81 | $ 16.16 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .33 | .70G | .49 | .46 | .33 | .26 |
Net realized and unrealized gain (loss) | .09 | 2.77 | 4.59 | 2.48 | .21 | .63 |
Total from investment operations | .42 | 3.47 | 5.08 | 2.94 | .54 | .89 |
Distributions from net investment income | (.30) | (.63) | (.47) | (.43) | (.32) | (.24) |
Distributions from net realized gain | (.08) | - | - | - | - | - |
Total distributions | (.38) | (.63) | (.47) | (.43) | (.32) | (.24) |
Net asset value, end of period | $ 27.03 | $ 26.99 | $ 24.15 | $ 19.54 | $ 17.03 | $ 16.81 |
Total ReturnB, C | 1.61% | 14.60% | 26.35% | 17.42% | 3.17% | 5.57% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .63%A | .63% | .65% | .67% | .68% | .69% |
Expenses net of fee waivers, if any | .63%A | .63% | .65% | .67% | .68% | .69% |
Expenses net of all reductions | .62%A | .63% | .63% | .66% | .67% | .69% |
Net investment income (loss) | 2.45%A | 2.78%G | 2.24% | 2.45% | 1.83% | 1.57% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 5,131 | $ 5,253 | $ 4,993 | $ 4,538 | $ 4,198 | $ 4,777 |
Portfolio turnover rateF | 60% A | 52% | 86% | 78% | 82% | 30% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.12 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 2.31%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class K
| Six months ended | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
| |
Net asset value, beginning of period | $ 26.99 | $ 24.15 | $ 19.53 | $ 17.03 | $ 16.82 | $ 16.16 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .34 | .73G | .51 | .48 | .35 | .28 |
Net realized and unrealized gain (loss) | .09 | 2.76 | 4.61 | 2.48 | .21 | .65 |
Total from investment operations | .43 | 3.49 | 5.12 | 2.96 | .56 | .93 |
Distributions from net investment income | (.31) | (.65) | (.50) | (.46) | (.35) | (.27) |
Distributions from net realized gain | (.08) | - | - | - | - | - |
Total distributions | (.39) | (.65) | (.50) | (.46) | (.35) | (.27) |
Net asset value, end of period | $ 27.03 | $ 26.99 | $ 24.15 | $ 19.53 | $ 17.03 | $ 16.82 |
Total ReturnB, C | 1.66% | 14.72% | 26.57% | 17.53% | 3.26% | 5.80% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .52%A | .52% | .53% | .54% | .54% | .54% |
Expenses net of fee waivers, if any | .52%A | .52% | .53% | .54% | .54% | .54% |
Expenses net of all reductions | .52%A | .52% | .51% | .53% | .53% | .54% |
Net investment income (loss) | 2.56%A | 2.89%G | 2.35% | 2.58% | 1.96% | 1.72% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 372 | $ 394 | $ 442 | $ 564 | $ 344 | $ 368 |
Portfolio turnover rateF | 60% A | 52% | 86% | 78% | 82% | 30% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.12 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 2.42%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Equity Dividend Income Fund (the Fund) is a fund of Fidelity Financial 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 Equity Dividend Income and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Valuation - continued
with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Preferred securities are valued by pricing vendors who utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 819,377 |
Gross unrealized depreciation | (86,612) |
Net unrealized appreciation (depreciation) on securities | $ 732,765 |
|
|
Tax cost | $ 4,844,525 |
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,618,444 and $1,878,844, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .45% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Equity Dividend Income. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Equity Dividend Income | $ 3,960 | .15 |
Class K | 89 | .05 |
| $ 4,049 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions - continued
are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $20 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan | Weighted Average | Interest Expense |
Borrower | $ 5,825 | .36% | $ -* |
* Two hundred and thirty-four dollars
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $4 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
7. Security Lending - continued
loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $222. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $123 for the period.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Equity Dividend Income expenses during the period in the amount of $1.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Equity Dividend Income | $ 57,217 | $ 126,326 |
Class K | 4,436 | 10,613 |
Total | $ 61,653 | $ 136,939 |
From net realized gain |
|
|
Equity Dividend Income | $ 16,312 | $ - |
Class K | 1,198 | - |
Total | $ 17,510 | $ - |
Semiannual Report
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Equity Dividend Income |
|
|
|
|
Shares sold | 3,899 | 7,923 | $ 104,338 | $ 198,417 |
Reinvestment of distributions | 2,652 | 4,804 | 69,493 | 119,565 |
Shares redeemed | (11,385) | (24,756) | (305,074) | (620,981) |
Net increase (decrease) | (4,834) | (12,029) | $ (131,243) | $ (302,999) |
Class K |
|
|
|
|
Shares sold | 1,722 | 2,503 | $ 46,056 | $ 63,155 |
Reinvestment of distributions | 215 | 427 | 5,634 | 10,613 |
Shares redeemed | (2,771) | (6,614) | (74,151) | (166,117) |
Net increase (decrease) | (834) | (3,684) | $ (22,461) | $ (92,349) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research (Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com
EII-K-USAN-0715 1.863199.106
Fidelity®
Equity Dividend Income
Fund
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
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 (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
Shareholder Expense Example - continued
| Annualized | Beginning | Ending | Expenses Paid |
Equity Dividend Income | .63% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,016.10 | $ 3.17 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.79 | $ 3.18 |
Class K | .52% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,016.60 | $ 2.61 |
HypotheticalA |
| $ 1,000.00 | $ 1,022.34 | $ 2.62 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
JPMorgan Chase & Co. | 3.8 | 3.4 |
General Electric Co. | 3.5 | 3.3 |
Johnson & Johnson | 3.4 | 3.3 |
Wells Fargo & Co. | 3.3 | 3.2 |
Chevron Corp. | 3.0 | 3.5 |
Procter & Gamble Co. | 2.5 | 2.7 |
Exxon Mobil Corp. | 2.4 | 3.7 |
Pfizer, Inc. | 2.3 | 1.3 |
Medtronic PLC | 2.2 | 1.9 |
AT&T, Inc. | 2.1 | 0.3 |
| 28.5 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Financials | 26.6 | 25.7 |
Health Care | 13.8 | 13.4 |
Information Technology | 11.8 | 10.7 |
Energy | 11.2 | 11.8 |
Consumer Staples | 10.8 | 11.5 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015* | As of November 30, 2014** | ||||||
Stocks 96.8% |
| Stocks 98.5% |
| ||||
Other Investments 0.0%† |
| Other Investments 0.1% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 12.6% |
| ** Foreign investments | 12.1% |
|
†Amount represents less than 0.1% |
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.8% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 7.4% | |||
Automobiles - 1.7% | |||
Ford Motor Co. | 3,313,300 | $ 50,263 | |
General Motors Co. | 1,231,900 | 44,311 | |
| 94,574 | ||
Hotels, Restaurants & Leisure - 1.5% | |||
Darden Restaurants, Inc. | 327,600 | 21,471 | |
DineEquity, Inc. | 159,000 | 15,518 | |
Wyndham Worldwide Corp. | 387,800 | 32,928 | |
Yum! Brands, Inc. | 161,300 | 14,535 | |
| 84,452 | ||
Media - 0.3% | |||
ITV PLC | 3,209,300 | 13,357 | |
Stingray Digital Group, Inc. | 27,900 | 140 | |
| 13,497 | ||
Multiline Retail - 1.5% | |||
Target Corp. | 1,019,200 | 80,843 | |
Specialty Retail - 1.2% | |||
Foot Locker, Inc. | 462,500 | 29,230 | |
Home Depot, Inc. | 184,500 | 20,557 | |
L Brands, Inc. | 78,100 | 6,757 | |
Staples, Inc. | 664,600 | 10,943 | |
| 67,487 | ||
Textiles, Apparel & Luxury Goods - 1.2% | |||
Coach, Inc. | 192,493 | 6,808 | |
Japan Tobacco, Inc. | 748,700 | 27,170 | |
VF Corp. | 457,800 | 32,243 | |
| 66,221 | ||
TOTAL CONSUMER DISCRETIONARY | 407,074 | ||
CONSUMER STAPLES - 10.8% | |||
Beverages - 2.2% | |||
Anheuser-Busch InBev SA NV ADR | 263,700 | 31,792 | |
Constellation Brands, Inc. Class A (sub. vtg.) | 123,300 | 14,536 | |
Molson Coors Brewing Co. Class B | 341,400 | 25,052 | |
SABMiller PLC | 248,700 | 13,281 | |
The Coca-Cola Co. | 870,300 | 35,647 | |
| 120,308 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
CONSUMER STAPLES - continued | |||
Food & Staples Retailing - 2.2% | |||
CVS Health Corp. | 890,300 | $ 91,149 | |
Walgreens Boots Alliance, Inc. | 371,400 | 31,881 | |
| 123,030 | ||
Food Products - 1.4% | |||
ConAgra Foods, Inc. | 1,124,200 | 43,405 | |
General Mills, Inc. | 206,000 | 11,567 | |
Kellogg Co. | 359,100 | 22,541 | |
| 77,513 | ||
Household Products - 3.3% | |||
Energizer Holdings, Inc. | 149,900 | 21,239 | |
Procter & Gamble Co. | 1,727,705 | 135,435 | |
Reckitt Benckiser Group PLC | 276,800 | 24,999 | |
| 181,673 | ||
Personal Products - 0.4% | |||
Estee Lauder Companies, Inc. Class A | 240,300 | 21,009 | |
Tobacco - 1.3% | |||
Altria Group, Inc. | 515,200 | 26,378 | |
Philip Morris International, Inc. | 144,900 | 12,037 | |
Reynolds American, Inc. | 300,400 | 23,056 | |
Universal Corp. | 144,676 | 7,449 | |
| 68,920 | ||
TOTAL CONSUMER STAPLES | 592,453 | ||
ENERGY - 11.2% | |||
Energy Equipment & Services - 0.2% | |||
Frank's International NV | 638,600 | 12,657 | |
Oil, Gas & Consumable Fuels - 11.0% | |||
Anadarko Petroleum Corp. | 350,100 | 29,272 | |
Chevron Corp. | 1,611,770 | 166,012 | |
Energy Transfer Equity LP | 431,200 | 29,611 | |
Enterprise Products Partners LP | 1,148,800 | 37,244 | |
Enviva Partners LP | 240,100 | 4,888 | |
Exxon Mobil Corp. | 1,562,756 | 133,147 | |
Husky Energy, Inc. | 1,265,000 | 24,861 | |
Kinder Morgan, Inc. | 1,352,400 | 56,111 | |
Markwest Energy Partners LP | 257,800 | 16,662 | |
Plains GP Holdings LP Class A | 803,900 | 22,477 | |
Suncor Energy, Inc. (c) | 1,603,300 | 46,864 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Western Gas Partners LP | 237,300 | $ 16,255 | |
Williams Partners LP | 352,794 | 19,714 | |
| 603,118 | ||
TOTAL ENERGY | 615,775 | ||
FINANCIALS - 26.6% | |||
Banks - 12.6% | |||
Bank of America Corp. | 2,257,700 | 37,252 | |
Community Trust Bancorp, Inc. | 302,720 | 9,920 | |
CVB Financial Corp. | 792,300 | 12,994 | |
JPMorgan Chase & Co. | 3,169,322 | 208,478 | |
Nordea Bank AB | 1,200,000 | 15,608 | |
PacWest Bancorp | 432,488 | 19,414 | |
Prosperity Bancshares, Inc. | 229,800 | 12,310 | |
Regions Financial Corp. | 3,278,400 | 33,079 | |
SunTrust Banks, Inc. | 530,600 | 22,646 | |
Svenska Handelsbanken AB (A Shares) (c) | 1,187,100 | 17,876 | |
U.S. Bancorp | 2,451,000 | 105,663 | |
Valley National Bancorp (c) | 1,229,800 | 12,027 | |
Wells Fargo & Co. | 3,271,808 | 183,090 | |
| 690,357 | ||
Capital Markets - 4.2% | |||
Ares Capital Corp. | 1,250,400 | 20,944 | |
BlackRock, Inc. Class A | 196,000 | 71,693 | |
KKR & Co. LP | 1,318,800 | 30,266 | |
The Blackstone Group LP | 2,515,200 | 110,166 | |
| 233,069 | ||
Consumer Finance - 1.2% | |||
Capital One Financial Corp. | 777,800 | 64,993 | |
Insurance - 5.7% | |||
ACE Ltd. | 695,500 | 74,057 | |
Allied World Assurance Co. | 345,300 | 14,672 | |
First American Financial Corp. | 801,800 | 28,632 | |
MetLife, Inc. | 1,170,529 | 61,172 | |
Principal Financial Group, Inc. | 745,700 | 38,545 | |
The Chubb Corp. | 628,808 | 61,309 | |
The Travelers Companies, Inc. | 367,200 | 37,131 | |
| 315,518 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
FINANCIALS - continued | |||
Real Estate Investment Trusts - 2.9% | |||
HCP, Inc. | 932,000 | $ 36,087 | |
Liberty Property Trust (SBI) | 462,100 | 16,146 | |
Simon Property Group, Inc. | 110,200 | 19,990 | |
UDR, Inc. | 612,900 | 19,956 | |
Urban Edge Properties | 493,200 | 10,653 | |
Weyerhaeuser Co. | 833,239 | 27,130 | |
WP Carey, Inc. | 451,300 | 28,743 | |
| 158,705 | ||
TOTAL FINANCIALS | 1,462,642 | ||
HEALTH CARE - 13.8% | |||
Biotechnology - 0.5% | |||
Amgen, Inc. | 190,700 | 29,799 | |
Health Care Equipment & Supplies - 2.8% | |||
Becton, Dickinson & Co. | 248,500 | 34,917 | |
Medtronic PLC | 1,570,564 | 119,865 | |
| 154,782 | ||
Pharmaceuticals - 10.5% | |||
AbbVie, Inc. | 869,000 | 57,867 | |
Bristol-Myers Squibb Co. | 444,800 | 28,734 | |
Eli Lilly & Co. | 790,500 | 62,370 | |
Johnson & Johnson | 1,864,366 | 186,698 | |
Pfizer, Inc. | 3,677,035 | 127,777 | |
Sanofi SA sponsored ADR | 1,119,900 | 55,334 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 952,900 | 57,269 | |
| 576,049 | ||
TOTAL HEALTH CARE | 760,630 | ||
INDUSTRIALS - 7.6% | |||
Aerospace & Defense - 2.0% | |||
The Boeing Co. | 112,800 | 15,851 | |
United Technologies Corp. | 821,330 | 96,235 | |
| 112,086 | ||
Air Freight & Logistics - 0.7% | |||
United Parcel Service, Inc. Class B | 369,700 | 36,682 | |
Airlines - 0.2% | |||
Copa Holdings SA Class A | 106,000 | 9,041 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - continued | |||
Electrical Equipment - 0.7% | |||
Eaton Corp. PLC | 524,500 | $ 37,549 | |
Industrial Conglomerates - 3.8% | |||
3M Co. | 102,700 | 16,338 | |
General Electric Co. | 6,996,997 | 190,808 | |
| 207,146 | ||
Machinery - 0.2% | |||
Deere & Co. | 143,400 | 13,434 | |
TOTAL INDUSTRIALS | 415,938 | ||
INFORMATION TECHNOLOGY - 11.8% | |||
Communications Equipment - 1.7% | |||
Cisco Systems, Inc. | 2,562,600 | 75,110 | |
QUALCOMM, Inc. | 308,500 | 21,496 | |
| 96,606 | ||
Electronic Equipment & Components - 0.2% | |||
TE Connectivity Ltd. | 199,200 | 13,745 | |
IT Services - 3.5% | |||
Accenture PLC Class A | 290,100 | 27,861 | |
Fidelity National Information Services, Inc. | 846,500 | 53,076 | |
IBM Corp. | 382,800 | 64,942 | |
Paychex, Inc. | 930,000 | 45,951 | |
| 191,830 | ||
Semiconductors & Semiconductor Equipment - 1.2% | |||
Cypress Semiconductor Corp. | 864,700 | 11,872 | |
Intel Corp. | 803,500 | 27,689 | |
Maxim Integrated Products, Inc. | 691,700 | 24,258 | |
| 63,819 | ||
Software - 2.6% | |||
Microsoft Corp. | 2,012,626 | 94,312 | |
Oracle Corp. | 810,200 | 35,236 | |
Symantec Corp. | 452,500 | 11,143 | |
| 140,691 | ||
Technology Hardware, Storage & Peripherals - 2.6% | |||
Apple, Inc. | 345,200 | 44,973 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Technology Hardware, Storage & Peripherals - continued | |||
EMC Corp. | 1,982,755 | $ 52,226 | |
Hewlett-Packard Co. | 1,445,800 | 48,290 | |
| 145,489 | ||
TOTAL INFORMATION TECHNOLOGY | 652,180 | ||
MATERIALS - 1.4% | |||
Chemicals - 1.4% | |||
E.I. du Pont de Nemours & Co. | 358,400 | 25,450 | |
LyondellBasell Industries NV Class A | 258,700 | 26,155 | |
Potash Corp. of Saskatchewan, Inc. | 758,100 | 23,860 | |
| 75,465 | ||
TELECOMMUNICATION SERVICES - 2.1% | |||
Diversified Telecommunication Services - 2.1% | |||
AT&T, Inc. | 3,347,400 | 115,619 | |
UTILITIES - 4.1% | |||
Electric Utilities - 3.6% | |||
American Electric Power Co., Inc. | 727,077 | 40,927 | |
Exelon Corp. | 744,900 | 25,200 | |
IDACORP, Inc. | 490,600 | 29,176 | |
PPL Corp. | 1,527,400 | 53,016 | |
Xcel Energy, Inc. | 1,510,700 | 51,439 | |
| 199,758 | ||
Multi-Utilities - 0.5% | |||
CMS Energy Corp. | 814,500 | 27,807 | |
TOTAL UTILITIES | 227,565 | ||
TOTAL COMMON STOCKS (Cost $4,584,135) |
|
Preferred Securities - 0.0% | ||||
| Principal | Value (000s) | ||
FINANCIALS - 0.0% | ||||
Diversified Financial Services - 0.0% | ||||
Baggot Securities Ltd. 10.24% (d)(e) (Cost $3,348) | EUR | 2,180 | $ 2,581 |
Money Market Funds - 4.5% | |||
Shares |
| ||
Fidelity Cash Central Fund, 0.15% (a) | 192,975,699 | 192,976 | |
Fidelity Securities Lending Cash Central Fund, 0.16% (a)(b) | 56,391,948 | 56,392 | |
TOTAL MONEY MARKET FUNDS (Cost $249,368) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $4,836,851) | 5,577,290 | ||
NET OTHER ASSETS (LIABILITIES) - (1.3)% | (73,952) | ||
NET ASSETS - 100% | $ 5,503,338 |
Currency Abbreviations | ||
EUR | - | European Monetary Unit |
Legend |
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(b) Investment made with cash collateral received from securities on loan. |
(c) Security or a portion of the security is on loan at period end. |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $2,581,000 or 0.0% of net assets. |
(e) Security is perpetual in nature with no stated maturity date. |
(f) Amount is stated in United States dollars unless otherwise noted. |
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 | $ 95 |
Fidelity Securities Lending Cash Central Fund | 222 |
Total | $ 317 |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 407,074 | $ 379,764 | $ 27,310 | $ - |
Consumer Staples | 592,453 | 567,454 | 24,999 | - |
Energy | 615,775 | 615,775 | - | - |
Financials | 1,462,642 | 1,462,642 | - | - |
Health Care | 760,630 | 760,630 | - | - |
Industrials | 415,938 | 415,938 | - | - |
Information Technology | 652,180 | 652,180 | - | - |
Materials | 75,465 | 75,465 | - | - |
Telecommunication Services | 115,619 | 115,619 | - | - |
Utilities | 227,565 | 227,565 | - | - |
Preferred Securities | 2,581 | - | 2,581 | - |
Money Market Funds | 249,368 | 249,368 | - | - |
Total Investments in Securities: | $ 5,577,290 | $ 5,522,400 | $ 54,890 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 87.4% |
Ireland | 3.4% |
Switzerland | 1.8% |
Canada | 1.8% |
Israel | 1.1% |
France | 1.0% |
Others (Individually Less Than 1%) | 3.5% |
| 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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $53,736) - See accompanying schedule: Unaffiliated issuers (cost $4,587,483) | $ 5,327,922 |
|
Fidelity Central Funds (cost $249,368) | 249,368 |
|
Total Investments (cost $4,836,851) |
| $ 5,577,290 |
Foreign currency held at value (cost $803) | 803 | |
Receivable for fund shares sold | 585 | |
Dividends receivable | 16,446 | |
Distributions receivable from Fidelity Central Funds | 28 | |
Prepaid expenses | 2 | |
Other receivables | 445 | |
Total assets | 5,595,599 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 27,822 | |
Payable for fund shares redeemed | 4,768 | |
Accrued management fee | 2,070 | |
Other affiliated payables | 768 | |
Other payables and accrued expenses | 441 | |
Collateral on securities loaned, at value | 56,392 | |
Total liabilities | 92,261 | |
|
|
|
Net Assets | $ 5,503,338 | |
Net Assets consist of: |
| |
Paid in capital | $ 4,534,718 | |
Undistributed net investment income | 32,042 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 196,183 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 740,395 | |
Net Assets | $ 5,503,338 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Equity Dividend Income: | $ 27.03 | |
|
|
|
Class K: | $ 27.03 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands Six months ended May 31, 2015 (Unaudited) | ||
|
|
|
Investment Income |
|
|
Dividends |
| $ 85,067 |
Interest |
| 20 |
Income from Fidelity Central Funds |
| 317 |
Total income |
| 85,404 |
|
|
|
Expenses | ||
Management fee | $ 12,445 | |
Transfer agent fees | 4,049 | |
Accounting and security lending fees | 556 | |
Custodian fees and expenses | 42 | |
Independent trustees' compensation | 12 | |
Registration fees | 45 | |
Audit | 34 | |
Legal | 11 | |
Miscellaneous | 22 | |
Total expenses before reductions | 17,216 | |
Expense reductions | (124) | 17,092 |
Net investment income (loss) | 68,312 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 190,708 | |
Foreign currency transactions | (1,429) | |
Total net realized gain (loss) |
| 189,279 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (168,819) | |
Assets and liabilities in foreign currencies | 73 | |
Total change in net unrealized appreciation (depreciation) |
| (168,746) |
Net gain (loss) | 20,533 | |
Net increase (decrease) in net assets resulting from operations | $ 88,845 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 68,312 | $ 151,941 |
Net realized gain (loss) | 189,279 | 519,620 |
Change in net unrealized appreciation (depreciation) | (168,746) | 73,900 |
Net increase (decrease) in net assets resulting | 88,845 | 745,461 |
Distributions to shareholders from net investment income | (61,653) | (136,939) |
Distributions to shareholders from net realized gain | (17,510) | - |
Total distributions | (79,163) | (136,939) |
Share transactions - net increase (decrease) | (153,704) | (395,348) |
Total increase (decrease) in net assets | (144,022) | 213,174 |
|
|
|
Net Assets | ||
Beginning of period | 5,647,360 | 5,434,186 |
End of period (including undistributed net investment income of $32,042 and undistributed net investment income of $25,383, respectively) | $ 5,503,338 | $ 5,647,360 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Equity Dividend Income
| Six months ended | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
| |
Net asset value, beginning of period | $ 26.99 | $ 24.15 | $ 19.54 | $ 17.03 | $ 16.81 | $ 16.16 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .33 | .70G | .49 | .46 | .33 | .26 |
Net realized and unrealized gain (loss) | .09 | 2.77 | 4.59 | 2.48 | .21 | .63 |
Total from investment operations | .42 | 3.47 | 5.08 | 2.94 | .54 | .89 |
Distributions from net investment income | (.30) | (.63) | (.47) | (.43) | (.32) | (.24) |
Distributions from net realized gain | (.08) | - | - | - | - | - |
Total distributions | (.38) | (.63) | (.47) | (.43) | (.32) | (.24) |
Net asset value, end of period | $ 27.03 | $ 26.99 | $ 24.15 | $ 19.54 | $ 17.03 | $ 16.81 |
Total ReturnB, C | 1.61% | 14.60% | 26.35% | 17.42% | 3.17% | 5.57% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .63%A | .63% | .65% | .67% | .68% | .69% |
Expenses net of fee waivers, if any | .63%A | .63% | .65% | .67% | .68% | .69% |
Expenses net of all reductions | .62%A | .63% | .63% | .66% | .67% | .69% |
Net investment income (loss) | 2.45%A | 2.78%G | 2.24% | 2.45% | 1.83% | 1.57% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 5,131 | $ 5,253 | $ 4,993 | $ 4,538 | $ 4,198 | $ 4,777 |
Portfolio turnover rateF | 60% A | 52% | 86% | 78% | 82% | 30% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.12 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 2.31%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class K
| Six months ended | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
| |
Net asset value, beginning of period | $ 26.99 | $ 24.15 | $ 19.53 | $ 17.03 | $ 16.82 | $ 16.16 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .34 | .73G | .51 | .48 | .35 | .28 |
Net realized and unrealized gain (loss) | .09 | 2.76 | 4.61 | 2.48 | .21 | .65 |
Total from investment operations | .43 | 3.49 | 5.12 | 2.96 | .56 | .93 |
Distributions from net investment income | (.31) | (.65) | (.50) | (.46) | (.35) | (.27) |
Distributions from net realized gain | (.08) | - | - | - | - | - |
Total distributions | (.39) | (.65) | (.50) | (.46) | (.35) | (.27) |
Net asset value, end of period | $ 27.03 | $ 26.99 | $ 24.15 | $ 19.53 | $ 17.03 | $ 16.82 |
Total ReturnB, C | 1.66% | 14.72% | 26.57% | 17.53% | 3.26% | 5.80% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .52%A | .52% | .53% | .54% | .54% | .54% |
Expenses net of fee waivers, if any | .52%A | .52% | .53% | .54% | .54% | .54% |
Expenses net of all reductions | .52%A | .52% | .51% | .53% | .53% | .54% |
Net investment income (loss) | 2.56%A | 2.89%G | 2.35% | 2.58% | 1.96% | 1.72% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 372 | $ 394 | $ 442 | $ 564 | $ 344 | $ 368 |
Portfolio turnover rateF | 60% A | 52% | 86% | 78% | 82% | 30% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.12 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 2.42%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Equity Dividend Income Fund (the Fund) is a fund of Fidelity Financial 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 Equity Dividend Income and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Valuation - continued
with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Preferred securities are valued by pricing vendors who utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 819,377 |
Gross unrealized depreciation | (86,612) |
Net unrealized appreciation (depreciation) on securities | $ 732,765 |
|
|
Tax cost | $ 4,844,525 |
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,618,444 and $1,878,844, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .45% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Equity Dividend Income. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Equity Dividend Income | $ 3,960 | .15 |
Class K | 89 | .05 |
| $ 4,049 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions - continued
are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $20 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan | Weighted Average | Interest Expense |
Borrower | $ 5,825 | .36% | $ -* |
* Two hundred and thirty-four dollars
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $4 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
7. Security Lending - continued
loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $222. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $123 for the period.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Equity Dividend Income expenses during the period in the amount of $1.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Equity Dividend Income | $ 57,217 | $ 126,326 |
Class K | 4,436 | 10,613 |
Total | $ 61,653 | $ 136,939 |
From net realized gain |
|
|
Equity Dividend Income | $ 16,312 | $ - |
Class K | 1,198 | - |
Total | $ 17,510 | $ - |
Semiannual Report
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Equity Dividend Income |
|
|
|
|
Shares sold | 3,899 | 7,923 | $ 104,338 | $ 198,417 |
Reinvestment of distributions | 2,652 | 4,804 | 69,493 | 119,565 |
Shares redeemed | (11,385) | (24,756) | (305,074) | (620,981) |
Net increase (decrease) | (4,834) | (12,029) | $ (131,243) | $ (302,999) |
Class K |
|
|
|
|
Shares sold | 1,722 | 2,503 | $ 46,056 | $ 63,155 |
Reinvestment of distributions | 215 | 427 | 5,634 | 10,613 |
Shares redeemed | (2,771) | (6,614) | (74,151) | (166,117) |
Net increase (decrease) | (834) | (3,684) | $ (22,461) | $ (92,349) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research (Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
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®)
1-800-544-5555
Automated line for quickest service
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com
EII-USAN-0715 1.786811.112
Fidelity®
Independence
Fund -
Class K
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-835-5092 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
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 (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
Shareholder Expense Example - continued
| Annualized | Beginning | Ending | Expenses Paid |
Independence | .86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,054.90 | $ 4.41 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.64 | $ 4.33 |
Class K | .77% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,055.40 | $ 3.95 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.09 | $ 3.88 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Apple, Inc. | 4.7 | 4.4 |
Gilead Sciences, Inc. | 2.9 | 2.4 |
Medivation, Inc. | 2.8 | 2.2 |
Celgene Corp. | 2.5 | 2.0 |
American Airlines Group, Inc. | 2.4 | 2.8 |
NXP Semiconductors NV | 2.3 | 1.0 |
The Boeing Co. | 2.2 | 2.2 |
Actavis PLC | 2.0 | 1.8 |
Monster Beverage Corp. | 2.0 | 1.8 |
Visa, Inc. Class A | 1.8 | 1.7 |
| 25.6 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Health Care | 32.7 | 24.8 |
Consumer Discretionary | 23.3 | 22.1 |
Information Technology | 17.2 | 17.2 |
Industrials | 10.9 | 11.1 |
Financials | 7.5 | 9.4 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015 * | As of November 30, 2014 ** | ||||||
Stocks 99.7% |
| Stocks 99.2% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 18.8% |
| ** Foreign investments | 16.6% |
|
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.7% | |||
Shares | Value (000)s | ||
CONSUMER DISCRETIONARY - 23.3% | |||
Auto Components - 1.6% | |||
Delphi Automotive PLC | 792,600 | $ 68,940 | |
Visteon Corp. (a) | 100,000 | 10,952 | |
| 79,892 | ||
Automobiles - 2.5% | |||
Ford Motor Co. | 4,000,000 | 60,680 | |
General Motors Co. | 1,800,000 | 64,746 | |
| 125,426 | ||
Hotels, Restaurants & Leisure - 2.1% | |||
Chipotle Mexican Grill, Inc. (a) | 104,100 | 64,076 | |
Fiesta Restaurant Group, Inc. (a) | 287,400 | 13,373 | |
Hilton Worldwide Holdings, Inc. (a) | 400,000 | 11,584 | |
Papa John's International, Inc. | 220,000 | 15,116 | |
| 104,149 | ||
Household Durables - 5.9% | |||
Barratt Developments PLC | 2,350,000 | 21,263 | |
Bellway PLC | 400,000 | 14,349 | |
D.R. Horton, Inc. | 2,075,000 | 54,199 | |
Harman International Industries, Inc. | 400,000 | 48,208 | |
KB Home (d) | 3,143,009 | 46,454 | |
Newell Rubbermaid, Inc. | 400,000 | 15,812 | |
PulteGroup, Inc. | 2,711,100 | 51,999 | |
Taylor Morrison Home Corp. (a) | 400,000 | 7,696 | |
Taylor Wimpey PLC | 2,000,000 | 5,609 | |
Whirlpool Corp. | 150,000 | 27,638 | |
| 293,227 | ||
Internet & Catalog Retail - 1.1% | |||
Priceline Group, Inc. (a) | 45,000 | 52,742 | |
Leisure Products - 0.3% | |||
Vista Outdoor, Inc. (a) | 300,000 | 13,827 | |
Media - 3.1% | |||
Comcast Corp. Class A | 200,000 | 11,692 | |
ITV PLC | 6,000,000 | 24,971 | |
Liberty Global PLC Class C (a) | 205,800 | 11,062 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - continued | |||
Media - continued | |||
Naspers Ltd. Class N | 324,000 | $ 47,622 | |
Time Warner, Inc. | 700,000 | 59,136 | |
| 154,483 | ||
Multiline Retail - 1.1% | |||
Burlington Stores, Inc. (a) | 400,000 | 21,108 | |
Macy's, Inc. | 463,200 | 31,011 | |
| 52,119 | ||
Specialty Retail - 3.7% | |||
Cabela's, Inc. Class A (a)(d) | 450,000 | 22,950 | |
Home Depot, Inc. | 616,000 | 68,635 | |
Lowe's Companies, Inc. | 769,300 | 53,836 | |
TJX Companies, Inc. | 607,500 | 39,111 | |
| 184,532 | ||
Textiles, Apparel & Luxury Goods - 1.9% | |||
Michael Kors Holdings Ltd. (a) | 1,111,147 | 51,668 | |
Pandora A/S | 100,000 | 10,055 | |
VF Corp. | 460,000 | 32,398 | |
| 94,121 | ||
TOTAL CONSUMER DISCRETIONARY | 1,154,518 | ||
CONSUMER STAPLES - 4.3% | |||
Beverages - 2.0% | |||
Monster Beverage Corp. (a) | 777,700 | 98,986 | |
Food & Staples Retailing - 0.7% | |||
CVS Health Corp. | 350,000 | 35,833 | |
Food Products - 1.2% | |||
Keurig Green Mountain, Inc. | 699,300 | 60,308 | |
Tobacco - 0.4% | |||
Imperial Tobacco Group PLC | 400,000 | 20,603 | |
TOTAL CONSUMER STAPLES | 215,730 | ||
ENERGY - 2.6% | |||
Energy Equipment & Services - 0.1% | |||
Independence Contract Drilling, Inc. | 371,900 | 2,730 | |
Oil, Gas & Consumable Fuels - 2.5% | |||
Anadarko Petroleum Corp. | 124,500 | 10,409 | |
Cheniere Energy, Inc. (a) | 75,000 | 5,687 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Chevron Corp. | 200,000 | $ 20,600 | |
Cimarex Energy Co. | 125,000 | 14,439 | |
Cobalt International Energy, Inc. (a) | 600,000 | 6,096 | |
Continental Resources, Inc. (a) | 562,600 | 25,632 | |
EOG Resources, Inc. | 269,000 | 23,858 | |
GasLog Ltd. | 599,900 | 12,418 | |
Genel Energy PLC (a) | 788,500 | 6,363 | |
| 125,502 | ||
TOTAL ENERGY | 128,232 | ||
FINANCIALS - 7.5% | |||
Banks - 1.6% | |||
Bank of America Corp. | 4,841,500 | 79,885 | |
Capital Markets - 3.9% | |||
Ameriprise Financial, Inc. | 308,600 | 38,448 | |
BlackRock, Inc. Class A | 125,000 | 45,723 | |
Morgan Stanley | 1,368,400 | 52,273 | |
The Blackstone Group LP | 1,350,000 | 59,130 | |
| 195,574 | ||
Consumer Finance - 0.9% | |||
Springleaf Holdings, Inc. (a) | 899,200 | 42,730 | |
Diversified Financial Services - 0.9% | |||
McGraw Hill Financial, Inc. | 420,000 | 43,575 | |
Real Estate Investment Trusts - 0.2% | |||
American Tower Corp. | 105,000 | 9,743 | |
TOTAL FINANCIALS | 371,507 | ||
HEALTH CARE - 32.7% | |||
Biotechnology - 19.7% | |||
Acorda Therapeutics, Inc. (a) | 650,000 | 19,812 | |
Actelion Ltd. | 159,267 | 22,267 | |
Alexion Pharmaceuticals, Inc. (a) | 510,800 | 83,689 | |
Alnylam Pharmaceuticals, Inc. (a) | 97,661 | 12,802 | |
Amgen, Inc. | 510,300 | 79,739 | |
Amicus Therapeutics, Inc. (a) | 51,388 | 633 | |
ARIAD Pharmaceuticals, Inc. (a)(d) | 1,782,600 | 16,364 | |
BioCryst Pharmaceuticals, Inc. (a) | 1,311,590 | 14,703 | |
Biogen, Inc. (a) | 152,400 | 60,501 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Biotechnology - continued | |||
BioMarin Pharmaceutical, Inc. (a) | 300,000 | $ 37,671 | |
Celgene Corp. (a) | 1,080,000 | 123,595 | |
Celldex Therapeutics, Inc. (a) | 268,800 | 7,760 | |
Clovis Oncology, Inc. (a) | 139,600 | 12,905 | |
Dyax Corp. (a) | 400,000 | 10,536 | |
Genmab A/S (a) | 300,000 | 26,344 | |
Gilead Sciences, Inc. | 1,286,800 | 144,469 | |
Intercept Pharmaceuticals, Inc. (a)(d) | 201,600 | 51,447 | |
KYTHERA Biopharmaceuticals, Inc. (a)(d) | 171,300 | 8,628 | |
Medivation, Inc. (a) | 1,042,100 | 137,609 | |
Medy-Tox, Inc. | 20,000 | 8,362 | |
Puma Biotechnology, Inc. (a) | 44,210 | 8,641 | |
Receptos, Inc. (a) | 100,000 | 16,489 | |
Regeneron Pharmaceuticals, Inc. (a) | 50,000 | 25,628 | |
TESARO, Inc. (a) | 200,000 | 11,752 | |
United Therapeutics Corp. (a) | 200,000 | 36,744 | |
| 979,090 | ||
Health Care Equipment & Supplies - 0.3% | |||
Innocoll AG ADR (a)(d) | 823,381 | 9,609 | |
Neovasc, Inc. (a) | 600,000 | 4,206 | |
| 13,815 | ||
Health Care Providers & Services - 3.7% | |||
Aetna, Inc. | 200,000 | 23,594 | |
Cigna Corp. | 225,000 | 31,687 | |
Community Health Systems, Inc. (a) | 200,000 | 11,062 | |
Express Scripts Holding Co. (a) | 600,000 | 52,284 | |
HCA Holdings, Inc. (a) | 325,000 | 26,595 | |
UnitedHealth Group, Inc. | 318,300 | 38,263 | |
| 183,485 | ||
Life Sciences Tools & Services - 0.4% | |||
Illumina, Inc. (a) | 100,000 | 20,608 | |
Pharmaceuticals - 8.6% | |||
Achaogen, Inc. (a) | 216,300 | 1,280 | |
Actavis PLC (a) | 325,000 | 99,713 | |
Akorn, Inc. (a)(d) | 500,000 | 22,950 | |
Bristol-Myers Squibb Co. | 600,000 | 38,760 | |
Jazz Pharmaceuticals PLC (a) | 252,500 | 45,286 | |
Mallinckrodt PLC (a) | 500,000 | 64,720 | |
Ocular Therapeutix, Inc. | 440,000 | 10,635 | |
Pacira Pharmaceuticals, Inc. (a)(d) | 475,000 | 37,150 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Relypsa, Inc. (a) | 291,600 | $ 10,728 | |
Shire PLC | 238,700 | 20,645 | |
Tetraphase Pharmaceuticals, Inc. (a) | 500,000 | 21,440 | |
Valeant Pharmaceuticals International (Canada) (a) | 220,260 | 52,504 | |
| 425,811 | ||
TOTAL HEALTH CARE | 1,622,809 | ||
INDUSTRIALS - 10.9% | |||
Aerospace & Defense - 3.5% | |||
Huntington Ingalls Industries, Inc. | 300,000 | 37,197 | |
Orbital ATK, Inc. | 100,000 | 7,650 | |
Textron, Inc. | 200,000 | 9,044 | |
The Boeing Co. | 785,600 | 110,393 | |
TransDigm Group, Inc. | 50,000 | 11,302 | |
| 175,586 | ||
Airlines - 6.9% | |||
American Airlines Group, Inc. | 2,824,500 | 119,674 | |
Delta Air Lines, Inc. | 1,661,775 | 71,323 | |
Southwest Airlines Co. | 2,150,000 | 79,658 | |
United Continental Holdings, Inc. (a) | 1,300,000 | 70,967 | |
| 341,622 | ||
Construction & Engineering - 0.1% | |||
Hyundai Industrial Development & Construction Co. | 100,000 | 5,430 | |
Professional Services - 0.4% | |||
Robert Half International, Inc. | 350,000 | 19,730 | |
TOTAL INDUSTRIALS | 542,368 | ||
INFORMATION TECHNOLOGY - 17.2% | |||
Communications Equipment - 0.2% | |||
Arista Networks, Inc. (d) | 135,900 | 9,501 | |
Internet Software & Services - 4.8% | |||
58.com, Inc. ADR (a) | 344,800 | 25,863 | |
Akamai Technologies, Inc. (a) | 200,000 | 15,254 | |
Alibaba Group Holding Ltd. sponsored ADR | 508,600 | 45,428 | |
Baidu.com, Inc. sponsored ADR (a) | 50,000 | 9,870 | |
Cornerstone OnDemand, Inc. (a) | 258,600 | 8,050 | |
Facebook, Inc. Class A (a) | 1,013,640 | 80,270 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Internet Software & Services - continued | |||
Just Dial Ltd. | 300,000 | $ 5,356 | |
Tencent Holdings Ltd. | 2,350,000 | 46,866 | |
| 236,957 | ||
IT Services - 2.8% | |||
FleetCor Technologies, Inc. (a) | 100,000 | 15,214 | |
MasterCard, Inc. Class A | 350,000 | 32,291 | |
Visa, Inc. Class A | 1,331,600 | 91,454 | |
| 138,959 | ||
Semiconductors & Semiconductor Equipment - 3.1% | |||
Broadcom Corp. Class A | 400,000 | 22,740 | |
NXP Semiconductors NV (a) | 1,000,000 | 112,250 | |
Qorvo, Inc. (a) | 200,000 | 16,430 | |
| 151,420 | ||
Software - 1.4% | |||
Adobe Systems, Inc. (a) | 500,000 | 39,545 | |
Fleetmatics Group PLC (a) | 300,000 | 12,543 | |
King Digital Entertainment PLC (d) | 776,000 | 11,438 | |
Mobileye NV (a) | 123,400 | 5,810 | |
| 69,336 | ||
Technology Hardware, Storage & Peripherals - 4.9% | |||
Apple, Inc. | 1,802,700 | 234,853 | |
Nimble Storage, Inc. (a)(d) | 400,774 | 10,372 | |
| 245,225 | ||
TOTAL INFORMATION TECHNOLOGY | 851,398 | ||
MATERIALS - 0.8% | |||
Chemicals - 0.2% | |||
CF Industries Holdings, Inc. | 25,000 | 7,897 | |
Novozymes A/S Series B | 100,000 | 4,810 | |
| 12,707 | ||
Containers & Packaging - 0.6% | |||
Rock-Tenn Co. Class A | 300,000 | 19,542 | |
Sealed Air Corp. | 200,000 | 9,740 | |
| 29,282 | ||
TOTAL MATERIALS | 41,989 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
UTILITIES - 0.4% | |||
Independent Power and Renewable Electricity Producers - 0.4% | |||
Dynegy, Inc. (a) | 655,645 | $ 21,204 | |
TOTAL COMMON STOCKS (Cost $3,464,878) |
| ||
Money Market Funds - 2.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.15% (b) | 25,487,538 | 25,488 | |
Fidelity Securities Lending Cash Central Fund, 0.16% (b)(c) | 112,621,116 | 112,621 | |
TOTAL MONEY MARKET FUNDS (Cost $138,109) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.5% (Cost $3,602,987) | 5,087,864 | ||
NET OTHER ASSETS (LIABILITIES) - (2.5)% | (126,050) | ||
NET ASSETS - 100% | $ 4,961,814 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, are available on the SEC's website or upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 26 |
Fidelity Securities Lending Cash Central Fund | 777 |
Total | $ 803 |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 1,154,518 | $ 1,154,518 | $ - | $ - |
Consumer Staples | 215,730 | 215,730 | - | - |
Energy | 128,232 | 128,232 | - | - |
Financials | 371,507 | 371,507 | - | - |
Health Care | 1,622,809 | 1,602,164 | 20,645 | - |
Industrials | 542,368 | 542,368 | - | - |
Information Technology | 851,398 | 804,532 | 46,866 | - |
Materials | 41,989 | 41,989 | - | - |
Utilities | 21,204 | 21,204 | - | - |
Money Market Funds | 138,109 | 138,109 | - | - |
Total Investments in Securities: | $ 5,087,864 | $ 5,020,353 | $ 67,511 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 81.2% |
Ireland | 4.7% |
Cayman Islands | 2.6% |
Netherlands | 2.4% |
United Kingdom | 1.9% |
Bailiwick of Jersey | 1.9% |
Canada | 1.2% |
British Virgin Islands | 1.0% |
South Africa | 1.0% |
Others (Individually Less Than 1%) | 2.1% |
| 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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $109,766) - See accompanying schedule: Unaffiliated issuers (cost $3,464,878) | $ 4,949,755 |
|
Fidelity Central Funds (cost $138,109) | 138,109 |
|
Total Investments (cost $3,602,987) |
| $ 5,087,864 |
Foreign currency held at value (cost $985) | 985 | |
Receivable for investments sold | 78,460 | |
Receivable for fund shares sold | 1,158 | |
Dividends receivable | 3,482 | |
Distributions receivable from Fidelity Central Funds | 133 | |
Prepaid expenses | 2 | |
Other receivables | 113 | |
Total assets | 5,172,197 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 91,468 | |
Payable for fund shares redeemed | 2,552 | |
Accrued management fee | 2,982 | |
Other affiliated payables | 610 | |
Other payables and accrued expenses | 150 | |
Collateral on securities loaned, at value | 112,621 | |
Total liabilities | 210,383 | |
|
|
|
Net Assets | $ 4,961,814 | |
Net Assets consist of: |
| |
Paid in capital | $ 3,273,694 | |
Undistributed net investment income | 1,964 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 201,289 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,484,867 | |
Net Assets | $ 4,961,814 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Independence: | $ 40.97 | |
|
|
|
Class K: | $ 40.99 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 24,569 |
Income from Fidelity Central Funds |
| 803 |
Total income |
| 25,372 |
|
|
|
Expenses | ||
Management fee | $ 13,461 | |
Performance adjustment | 3,453 | |
Transfer agent fees | 3,039 | |
Accounting and security lending fees | 558 | |
Custodian fees and expenses | 67 | |
Independent trustees' compensation | 11 | |
Registration fees | 54 | |
Audit | 33 | |
Legal | 7 | |
Miscellaneous | 22 | |
Total expenses before reductions | 20,705 | |
Expense reductions | (61) | 20,644 |
Net investment income (loss) | 4,728 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 199,688 | |
Foreign currency transactions | 102 | |
Total net realized gain (loss) |
| 199,790 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 55,088 | |
Assets and liabilities in foreign currencies | (7) | |
Total change in net unrealized appreciation (depreciation) |
| 55,081 |
Net gain (loss) | 254,871 | |
Net increase (decrease) in net assets resulting from operations | $ 259,599 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 4,728 | $ 13,054 |
Net realized gain (loss) | 199,790 | 561,898 |
Change in net unrealized appreciation (depreciation) | 55,081 | 133,772 |
Net increase (decrease) in net assets resulting | 259,599 | 708,724 |
Distributions to shareholders from net investment income | (5,737) | (13,748) |
Distributions to shareholders from net realized gain | (233,191) | - |
Total distributions | (238,928) | (13,748) |
Share transactions - net increase (decrease) | 22,431 | (36,452) |
Total increase (decrease) in net assets | 43,102 | 658,524 |
|
|
|
Net Assets | ||
Beginning of period | 4,918,712 | 4,260,188 |
End of period (including undistributed net investment income of $1,964 and undistributed net investment income of $2,973, respectively) | $ 4,961,814 | $ 4,918,712 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Independence
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 40.89 | $ 35.10 | $ 25.44 | $ 22.35 | $ 23.29 | $ 19.10 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .04 | .10 | .19 | .04 | .05G | (.03) |
Net realized and unrealized gain (loss) | 2.03 | 5.80 | 9.52 | 3.11 | (.99) | 4.26 |
Total from investment operations | 2.07 | 5.90 | 9.71 | 3.15 | (.94) | 4.23 |
Distributions from net investment income | (.04) | (.11) | (.05) | (.06) | - | (.03) |
Distributions from net realized gain | (1.95) | - | - | - | - | (.01) |
Total distributions | (1.99) | (.11) | (.05) | (.06) | - | (.04) |
Net asset value, end of period | $ 40.97 | $ 40.89 | $ 35.10 | $ 25.44 | $ 22.35 | $ 23.29 |
Total ReturnB, C | 5.49% | 16.87% | 38.24% | 14.14% | (4.04)% | 22.18% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .86%A | .73% | .62% | .78% | .70% | .92% |
Expenses net of fee waivers, if any | .86%A | .73% | .62% | .78% | .70% | .92% |
Expenses net of all reductions | .85%A | .73% | .60% | .77% | .70% | .92% |
Net investment income (loss) | .18%A | .27% | .64% | .17% | .21%G | (.16)% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 4,307 | $ 4,251 | $ 3,772 | $ 3,055 | $ 3,272 | $ 3,988 |
Portfolio turnover rateF | 54% A | 53% | 59% | 82% | 93% | 103% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .08%. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class K
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
| |
Net asset value, beginning of period | $ 40.93 | $ 35.14 | $ 25.48 | $ 22.39 | $ 23.31 | $ 19.12 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .05 | .14 | .22 | .07 | .08G | -I |
Net realized and unrealized gain (loss) | 2.04 | 5.79 | 9.52 | 3.12 | (1.00) | 4.26 |
Total from investment operations | 2.09 | 5.93 | 9.74 | 3.19 | (.92) | 4.26 |
Distributions from net investment income | (.08) | (.14) | (.08) | (.10) | - | (.07) |
Distributions from net realized gain | (1.95) | - | - | - | - | (.01) |
Total distributions | �� (2.03) | (.14) | (.08) | (.10) | - | (.07)J |
Net asset value, end of period | $ 40.99 | $ 40.93 | $ 35.14 | $ 25.48 | $ 22.39 | $ 23.31 |
Total ReturnB, C | 5.54% | 16.95% | 38.35% | 14.33% | (3.95)% | 22.37% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .77%A | .64% | .51% | .66% | .57% | .78% |
Expenses net of fee waivers, if any | .77%A | .64% | .51% | .66% | .57% | .78% |
Expenses net of all reductions | .76%A | .64% | .50% | .65% | .57% | .77% |
Net investment income (loss) | .27%A | .36% | .74% | .29% | .34%G | (.01)% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 654 | $ 668 | $ 488 | $ 387 | $ 287 | $ 243 |
Portfolio turnover rateF | 54% A | 53% | 59% | 82% | 93% | 103% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .21%. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. IAmount represents less than $.01 per share. JTotal distributions of $.07 per share is comprised of distributions from net investment income of $.067 and distributions from net realized gain of $.005 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Independence Fund (the Fund) is a fund of Fidelity Financial 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 Independence and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions, partnerships deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 1,587,168 |
Gross unrealized depreciation | (103,172) |
Net unrealized appreciation (depreciation) on securities | $ 1,483,996 |
|
|
Tax cost | $ 3,603,868 |
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,304,969 and $1,487,681, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Independence as compared to its benchmark index, the S&P 500 Index, over the same 36 month performance period. For the reporting period, the total annualized management fee rate, including the performance adjustment, was .69% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Independence. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Independence | $ 2,885 | .14 |
Class K | 154 | .05 |
| $ 3,039 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $18 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $4 and is reflected in Miscellaneous expenses on the Statement of Operations.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. The value of securities loaned to FCM at period end was $8,615. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $777, including $29 from securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $57 for the period.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Independence expenses during the period in the amount of $4.
Semiannual Report
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Independence | $ 4,437 | $ 11,770 |
Class K | 1,300 | 1,978 |
Total | $ 5,737 | $ 13,748 |
From net realized gain |
|
|
Independence | $ 201,818 | $ - |
Class K | 31,373 | - |
Total | $ 233,191 | $ - |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Independence |
|
|
|
|
Shares sold | 2,841 | 10,786 | $ 113,881 | $ 420,406 |
Reinvestment of distributions | 5,341 | 333 | 202,092 | 11,555 |
Shares redeemed | (6,996) | (14,609) | (278,364) | (564,287) |
Net increase (decrease) | 1,186 | (3,490) | $ 37,609 | $ (132,326) |
Class K |
|
|
|
|
Shares sold | 1,599 | 7,061 | $ 63,917 | $ 274,500 |
Reinvestment of distributions | 863 | 57 | 32,673 | 1,978 |
Shares redeemed | (2,804) | (4,709) | (111,768) | (180,604) |
Net increase (decrease) | (342) | 2,409 | $ (15,178) | $ 95,874 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, Illinois
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com
FRE-K-USAN-0715 1.863218.106
Fidelity®
Independence
Fund
Semiannual Report
May 31, 2015
(Fidelity Cover Art)
Contents
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to 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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2015 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
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 (December 1, 2014 to May 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
Shareholder Expense Example - continued
| Annualized | Beginning | Ending | Expenses Paid |
Independence | .86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,054.90 | $ 4.41 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.64 | $ 4.33 |
Class K | .77% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,055.40 | $ 3.95 |
HypotheticalA |
| $ 1,000.00 | $ 1,021.09 | $ 3.88 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Apple, Inc. | 4.7 | 4.4 |
Gilead Sciences, Inc. | 2.9 | 2.4 |
Medivation, Inc. | 2.8 | 2.2 |
Celgene Corp. | 2.5 | 2.0 |
American Airlines Group, Inc. | 2.4 | 2.8 |
NXP Semiconductors NV | 2.3 | 1.0 |
The Boeing Co. | 2.2 | 2.2 |
Actavis PLC | 2.0 | 1.8 |
Monster Beverage Corp. | 2.0 | 1.8 |
Visa, Inc. Class A | 1.8 | 1.7 |
| 25.6 | |
Top Five Market Sectors as of May 31, 2015 | ||
| % of fund's | % of fund's net assets |
Health Care | 32.7 | 24.8 |
Consumer Discretionary | 23.3 | 22.1 |
Information Technology | 17.2 | 17.2 |
Industrials | 10.9 | 11.1 |
Financials | 7.5 | 9.4 |
Asset Allocation (% of fund's net assets) | |||||||
As of May 31, 2015 * | As of November 30, 2014 ** | ||||||
Stocks 99.7% |
| Stocks 99.2% |
| ||||
Short-Term |
| Short-Term |
| ||||
* Foreign investments | 18.8% |
| ** Foreign investments | 16.6% |
|
Semiannual Report
Investments May 31, 2015 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.7% | |||
Shares | Value (000)s | ||
CONSUMER DISCRETIONARY - 23.3% | |||
Auto Components - 1.6% | |||
Delphi Automotive PLC | 792,600 | $ 68,940 | |
Visteon Corp. (a) | 100,000 | 10,952 | |
| 79,892 | ||
Automobiles - 2.5% | |||
Ford Motor Co. | 4,000,000 | 60,680 | |
General Motors Co. | 1,800,000 | 64,746 | |
| 125,426 | ||
Hotels, Restaurants & Leisure - 2.1% | |||
Chipotle Mexican Grill, Inc. (a) | 104,100 | 64,076 | |
Fiesta Restaurant Group, Inc. (a) | 287,400 | 13,373 | |
Hilton Worldwide Holdings, Inc. (a) | 400,000 | 11,584 | |
Papa John's International, Inc. | 220,000 | 15,116 | |
| 104,149 | ||
Household Durables - 5.9% | |||
Barratt Developments PLC | 2,350,000 | 21,263 | |
Bellway PLC | 400,000 | 14,349 | |
D.R. Horton, Inc. | 2,075,000 | 54,199 | |
Harman International Industries, Inc. | 400,000 | 48,208 | |
KB Home (d) | 3,143,009 | 46,454 | |
Newell Rubbermaid, Inc. | 400,000 | 15,812 | |
PulteGroup, Inc. | 2,711,100 | 51,999 | |
Taylor Morrison Home Corp. (a) | 400,000 | 7,696 | |
Taylor Wimpey PLC | 2,000,000 | 5,609 | |
Whirlpool Corp. | 150,000 | 27,638 | |
| 293,227 | ||
Internet & Catalog Retail - 1.1% | |||
Priceline Group, Inc. (a) | 45,000 | 52,742 | |
Leisure Products - 0.3% | |||
Vista Outdoor, Inc. (a) | 300,000 | 13,827 | |
Media - 3.1% | |||
Comcast Corp. Class A | 200,000 | 11,692 | |
ITV PLC | 6,000,000 | 24,971 | |
Liberty Global PLC Class C (a) | 205,800 | 11,062 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - continued | |||
Media - continued | |||
Naspers Ltd. Class N | 324,000 | $ 47,622 | |
Time Warner, Inc. | 700,000 | 59,136 | |
| 154,483 | ||
Multiline Retail - 1.1% | |||
Burlington Stores, Inc. (a) | 400,000 | 21,108 | |
Macy's, Inc. | 463,200 | 31,011 | |
| 52,119 | ||
Specialty Retail - 3.7% | |||
Cabela's, Inc. Class A (a)(d) | 450,000 | 22,950 | |
Home Depot, Inc. | 616,000 | 68,635 | |
Lowe's Companies, Inc. | 769,300 | 53,836 | |
TJX Companies, Inc. | 607,500 | 39,111 | |
| 184,532 | ||
Textiles, Apparel & Luxury Goods - 1.9% | |||
Michael Kors Holdings Ltd. (a) | 1,111,147 | 51,668 | |
Pandora A/S | 100,000 | 10,055 | |
VF Corp. | 460,000 | 32,398 | |
| 94,121 | ||
TOTAL CONSUMER DISCRETIONARY | 1,154,518 | ||
CONSUMER STAPLES - 4.3% | |||
Beverages - 2.0% | |||
Monster Beverage Corp. (a) | 777,700 | 98,986 | |
Food & Staples Retailing - 0.7% | |||
CVS Health Corp. | 350,000 | 35,833 | |
Food Products - 1.2% | |||
Keurig Green Mountain, Inc. | 699,300 | 60,308 | |
Tobacco - 0.4% | |||
Imperial Tobacco Group PLC | 400,000 | 20,603 | |
TOTAL CONSUMER STAPLES | 215,730 | ||
ENERGY - 2.6% | |||
Energy Equipment & Services - 0.1% | |||
Independence Contract Drilling, Inc. | 371,900 | 2,730 | |
Oil, Gas & Consumable Fuels - 2.5% | |||
Anadarko Petroleum Corp. | 124,500 | 10,409 | |
Cheniere Energy, Inc. (a) | 75,000 | 5,687 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Chevron Corp. | 200,000 | $ 20,600 | |
Cimarex Energy Co. | 125,000 | 14,439 | |
Cobalt International Energy, Inc. (a) | 600,000 | 6,096 | |
Continental Resources, Inc. (a) | 562,600 | 25,632 | |
EOG Resources, Inc. | 269,000 | 23,858 | |
GasLog Ltd. | 599,900 | 12,418 | |
Genel Energy PLC (a) | 788,500 | 6,363 | |
| 125,502 | ||
TOTAL ENERGY | 128,232 | ||
FINANCIALS - 7.5% | |||
Banks - 1.6% | |||
Bank of America Corp. | 4,841,500 | 79,885 | |
Capital Markets - 3.9% | |||
Ameriprise Financial, Inc. | 308,600 | 38,448 | |
BlackRock, Inc. Class A | 125,000 | 45,723 | |
Morgan Stanley | 1,368,400 | 52,273 | |
The Blackstone Group LP | 1,350,000 | 59,130 | |
| 195,574 | ||
Consumer Finance - 0.9% | |||
Springleaf Holdings, Inc. (a) | 899,200 | 42,730 | |
Diversified Financial Services - 0.9% | |||
McGraw Hill Financial, Inc. | 420,000 | 43,575 | |
Real Estate Investment Trusts - 0.2% | |||
American Tower Corp. | 105,000 | 9,743 | |
TOTAL FINANCIALS | 371,507 | ||
HEALTH CARE - 32.7% | |||
Biotechnology - 19.7% | |||
Acorda Therapeutics, Inc. (a) | 650,000 | 19,812 | |
Actelion Ltd. | 159,267 | 22,267 | |
Alexion Pharmaceuticals, Inc. (a) | 510,800 | 83,689 | |
Alnylam Pharmaceuticals, Inc. (a) | 97,661 | 12,802 | |
Amgen, Inc. | 510,300 | 79,739 | |
Amicus Therapeutics, Inc. (a) | 51,388 | 633 | |
ARIAD Pharmaceuticals, Inc. (a)(d) | 1,782,600 | 16,364 | |
BioCryst Pharmaceuticals, Inc. (a) | 1,311,590 | 14,703 | |
Biogen, Inc. (a) | 152,400 | 60,501 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Biotechnology - continued | |||
BioMarin Pharmaceutical, Inc. (a) | 300,000 | $ 37,671 | |
Celgene Corp. (a) | 1,080,000 | 123,595 | |
Celldex Therapeutics, Inc. (a) | 268,800 | 7,760 | |
Clovis Oncology, Inc. (a) | 139,600 | 12,905 | |
Dyax Corp. (a) | 400,000 | 10,536 | |
Genmab A/S (a) | 300,000 | 26,344 | |
Gilead Sciences, Inc. | 1,286,800 | 144,469 | |
Intercept Pharmaceuticals, Inc. (a)(d) | 201,600 | 51,447 | |
KYTHERA Biopharmaceuticals, Inc. (a)(d) | 171,300 | 8,628 | |
Medivation, Inc. (a) | 1,042,100 | 137,609 | |
Medy-Tox, Inc. | 20,000 | 8,362 | |
Puma Biotechnology, Inc. (a) | 44,210 | 8,641 | |
Receptos, Inc. (a) | 100,000 | 16,489 | |
Regeneron Pharmaceuticals, Inc. (a) | 50,000 | 25,628 | |
TESARO, Inc. (a) | 200,000 | 11,752 | |
United Therapeutics Corp. (a) | 200,000 | 36,744 | |
| 979,090 | ||
Health Care Equipment & Supplies - 0.3% | |||
Innocoll AG ADR (a)(d) | 823,381 | 9,609 | |
Neovasc, Inc. (a) | 600,000 | 4,206 | |
| 13,815 | ||
Health Care Providers & Services - 3.7% | |||
Aetna, Inc. | 200,000 | 23,594 | |
Cigna Corp. | 225,000 | 31,687 | |
Community Health Systems, Inc. (a) | 200,000 | 11,062 | |
Express Scripts Holding Co. (a) | 600,000 | 52,284 | |
HCA Holdings, Inc. (a) | 325,000 | 26,595 | |
UnitedHealth Group, Inc. | 318,300 | 38,263 | |
| 183,485 | ||
Life Sciences Tools & Services - 0.4% | |||
Illumina, Inc. (a) | 100,000 | 20,608 | |
Pharmaceuticals - 8.6% | |||
Achaogen, Inc. (a) | 216,300 | 1,280 | |
Actavis PLC (a) | 325,000 | 99,713 | |
Akorn, Inc. (a)(d) | 500,000 | 22,950 | |
Bristol-Myers Squibb Co. | 600,000 | 38,760 | |
Jazz Pharmaceuticals PLC (a) | 252,500 | 45,286 | |
Mallinckrodt PLC (a) | 500,000 | 64,720 | |
Ocular Therapeutix, Inc. | 440,000 | 10,635 | |
Pacira Pharmaceuticals, Inc. (a)(d) | 475,000 | 37,150 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Relypsa, Inc. (a) | 291,600 | $ 10,728 | |
Shire PLC | 238,700 | 20,645 | |
Tetraphase Pharmaceuticals, Inc. (a) | 500,000 | 21,440 | |
Valeant Pharmaceuticals International (Canada) (a) | 220,260 | 52,504 | |
| 425,811 | ||
TOTAL HEALTH CARE | 1,622,809 | ||
INDUSTRIALS - 10.9% | |||
Aerospace & Defense - 3.5% | |||
Huntington Ingalls Industries, Inc. | 300,000 | 37,197 | |
Orbital ATK, Inc. | 100,000 | 7,650 | |
Textron, Inc. | 200,000 | 9,044 | |
The Boeing Co. | 785,600 | 110,393 | |
TransDigm Group, Inc. | 50,000 | 11,302 | |
| 175,586 | ||
Airlines - 6.9% | |||
American Airlines Group, Inc. | 2,824,500 | 119,674 | |
Delta Air Lines, Inc. | 1,661,775 | 71,323 | |
Southwest Airlines Co. | 2,150,000 | 79,658 | |
United Continental Holdings, Inc. (a) | 1,300,000 | 70,967 | |
| 341,622 | ||
Construction & Engineering - 0.1% | |||
Hyundai Industrial Development & Construction Co. | 100,000 | 5,430 | |
Professional Services - 0.4% | |||
Robert Half International, Inc. | 350,000 | 19,730 | |
TOTAL INDUSTRIALS | 542,368 | ||
INFORMATION TECHNOLOGY - 17.2% | |||
Communications Equipment - 0.2% | |||
Arista Networks, Inc. (d) | 135,900 | 9,501 | |
Internet Software & Services - 4.8% | |||
58.com, Inc. ADR (a) | 344,800 | 25,863 | |
Akamai Technologies, Inc. (a) | 200,000 | 15,254 | |
Alibaba Group Holding Ltd. sponsored ADR | 508,600 | 45,428 | |
Baidu.com, Inc. sponsored ADR (a) | 50,000 | 9,870 | |
Cornerstone OnDemand, Inc. (a) | 258,600 | 8,050 | |
Facebook, Inc. Class A (a) | 1,013,640 | 80,270 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Internet Software & Services - continued | |||
Just Dial Ltd. | 300,000 | $ 5,356 | |
Tencent Holdings Ltd. | 2,350,000 | 46,866 | |
| 236,957 | ||
IT Services - 2.8% | |||
FleetCor Technologies, Inc. (a) | 100,000 | 15,214 | |
MasterCard, Inc. Class A | 350,000 | 32,291 | |
Visa, Inc. Class A | 1,331,600 | 91,454 | |
| 138,959 | ||
Semiconductors & Semiconductor Equipment - 3.1% | |||
Broadcom Corp. Class A | 400,000 | 22,740 | |
NXP Semiconductors NV (a) | 1,000,000 | 112,250 | |
Qorvo, Inc. (a) | 200,000 | 16,430 | |
| 151,420 | ||
Software - 1.4% | |||
Adobe Systems, Inc. (a) | 500,000 | 39,545 | |
Fleetmatics Group PLC (a) | 300,000 | 12,543 | |
King Digital Entertainment PLC (d) | 776,000 | 11,438 | |
Mobileye NV (a) | 123,400 | 5,810 | |
| 69,336 | ||
Technology Hardware, Storage & Peripherals - 4.9% | |||
Apple, Inc. | 1,802,700 | 234,853 | |
Nimble Storage, Inc. (a)(d) | 400,774 | 10,372 | |
| 245,225 | ||
TOTAL INFORMATION TECHNOLOGY | 851,398 | ||
MATERIALS - 0.8% | |||
Chemicals - 0.2% | |||
CF Industries Holdings, Inc. | 25,000 | 7,897 | |
Novozymes A/S Series B | 100,000 | 4,810 | |
| 12,707 | ||
Containers & Packaging - 0.6% | |||
Rock-Tenn Co. Class A | 300,000 | 19,542 | |
Sealed Air Corp. | 200,000 | 9,740 | |
| 29,282 | ||
TOTAL MATERIALS | 41,989 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
UTILITIES - 0.4% | |||
Independent Power and Renewable Electricity Producers - 0.4% | |||
Dynegy, Inc. (a) | 655,645 | $ 21,204 | |
TOTAL COMMON STOCKS (Cost $3,464,878) |
| ||
Money Market Funds - 2.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.15% (b) | 25,487,538 | 25,488 | |
Fidelity Securities Lending Cash Central Fund, 0.16% (b)(c) | 112,621,116 | 112,621 | |
TOTAL MONEY MARKET FUNDS (Cost $138,109) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.5% (Cost $3,602,987) | 5,087,864 | ||
NET OTHER ASSETS (LIABILITIES) - (2.5)% | (126,050) | ||
NET ASSETS - 100% | $ 4,961,814 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, are available on the SEC's website or upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 26 |
Fidelity Securities Lending Cash Central Fund | 777 |
Total | $ 803 |
Other Information |
The following is a summary of the inputs used, as of May 31, 2015, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $ 1,154,518 | $ 1,154,518 | $ - | $ - |
Consumer Staples | 215,730 | 215,730 | - | - |
Energy | 128,232 | 128,232 | - | - |
Financials | 371,507 | 371,507 | - | - |
Health Care | 1,622,809 | 1,602,164 | 20,645 | - |
Industrials | 542,368 | 542,368 | - | - |
Information Technology | 851,398 | 804,532 | 46,866 | - |
Materials | 41,989 | 41,989 | - | - |
Utilities | 21,204 | 21,204 | - | - |
Money Market Funds | 138,109 | 138,109 | - | - |
Total Investments in Securities: | $ 5,087,864 | $ 5,020,353 | $ 67,511 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 81.2% |
Ireland | 4.7% |
Cayman Islands | 2.6% |
Netherlands | 2.4% |
United Kingdom | 1.9% |
Bailiwick of Jersey | 1.9% |
Canada | 1.2% |
British Virgin Islands | 1.0% |
South Africa | 1.0% |
Others (Individually Less Than 1%) | 2.1% |
| 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) | May 31, 2015 (Unaudited) | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $109,766) - See accompanying schedule: Unaffiliated issuers (cost $3,464,878) | $ 4,949,755 |
|
Fidelity Central Funds (cost $138,109) | 138,109 |
|
Total Investments (cost $3,602,987) |
| $ 5,087,864 |
Foreign currency held at value (cost $985) | 985 | |
Receivable for investments sold | 78,460 | |
Receivable for fund shares sold | 1,158 | |
Dividends receivable | 3,482 | |
Distributions receivable from Fidelity Central Funds | 133 | |
Prepaid expenses | 2 | |
Other receivables | 113 | |
Total assets | 5,172,197 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 91,468 | |
Payable for fund shares redeemed | 2,552 | |
Accrued management fee | 2,982 | |
Other affiliated payables | 610 | |
Other payables and accrued expenses | 150 | |
Collateral on securities loaned, at value | 112,621 | |
Total liabilities | 210,383 | |
|
|
|
Net Assets | $ 4,961,814 | |
Net Assets consist of: |
| |
Paid in capital | $ 3,273,694 | |
Undistributed net investment income | 1,964 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 201,289 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,484,867 | |
Net Assets | $ 4,961,814 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
Amounts in thousands (except per-share amounts) | May 31, 2015 (Unaudited) | |
|
|
|
Independence: | $ 40.97 | |
|
|
|
Class K: | $ 40.99 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 24,569 |
Income from Fidelity Central Funds |
| 803 |
Total income |
| 25,372 |
|
|
|
Expenses | ||
Management fee | $ 13,461 | |
Performance adjustment | 3,453 | |
Transfer agent fees | 3,039 | |
Accounting and security lending fees | 558 | |
Custodian fees and expenses | 67 | |
Independent trustees' compensation | 11 | |
Registration fees | 54 | |
Audit | 33 | |
Legal | 7 | |
Miscellaneous | 22 | |
Total expenses before reductions | 20,705 | |
Expense reductions | (61) | 20,644 |
Net investment income (loss) | 4,728 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 199,688 | |
Foreign currency transactions | 102 | |
Total net realized gain (loss) |
| 199,790 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 55,088 | |
Assets and liabilities in foreign currencies | (7) | |
Total change in net unrealized appreciation (depreciation) |
| 55,081 |
Net gain (loss) | 254,871 | |
Net increase (decrease) in net assets resulting from operations | $ 259,599 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended May 31, 2015 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 4,728 | $ 13,054 |
Net realized gain (loss) | 199,790 | 561,898 |
Change in net unrealized appreciation (depreciation) | 55,081 | 133,772 |
Net increase (decrease) in net assets resulting | 259,599 | 708,724 |
Distributions to shareholders from net investment income | (5,737) | (13,748) |
Distributions to shareholders from net realized gain | (233,191) | - |
Total distributions | (238,928) | (13,748) |
Share transactions - net increase (decrease) | 22,431 | (36,452) |
Total increase (decrease) in net assets | 43,102 | 658,524 |
|
|
|
Net Assets | ||
Beginning of period | 4,918,712 | 4,260,188 |
End of period (including undistributed net investment income of $1,964 and undistributed net investment income of $2,973, respectively) | $ 4,961,814 | $ 4,918,712 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Independence
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period | $ 40.89 | $ 35.10 | $ 25.44 | $ 22.35 | $ 23.29 | $ 19.10 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .04 | .10 | .19 | .04 | .05G | (.03) |
Net realized and unrealized gain (loss) | 2.03 | 5.80 | 9.52 | 3.11 | (.99) | 4.26 |
Total from investment operations | 2.07 | 5.90 | 9.71 | 3.15 | (.94) | 4.23 |
Distributions from net investment income | (.04) | (.11) | (.05) | (.06) | - | (.03) |
Distributions from net realized gain | (1.95) | - | - | - | - | (.01) |
Total distributions | (1.99) | (.11) | (.05) | (.06) | - | (.04) |
Net asset value, end of period | $ 40.97 | $ 40.89 | $ 35.10 | $ 25.44 | $ 22.35 | $ 23.29 |
Total ReturnB, C | 5.49% | 16.87% | 38.24% | 14.14% | (4.04)% | 22.18% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .86%A | .73% | .62% | .78% | .70% | .92% |
Expenses net of fee waivers, if any | .86%A | .73% | .62% | .78% | .70% | .92% |
Expenses net of all reductions | .85%A | .73% | .60% | .77% | .70% | .92% |
Net investment income (loss) | .18%A | .27% | .64% | .17% | .21%G | (.16)% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 4,307 | $ 4,251 | $ 3,772 | $ 3,055 | $ 3,272 | $ 3,988 |
Portfolio turnover rateF | 54% A | 53% | 59% | 82% | 93% | 103% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .08%. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class K
| Six months ended May 31, 2015 | Years ended November 30, | ||||
| (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
| |
Net asset value, beginning of period | $ 40.93 | $ 35.14 | $ 25.48 | $ 22.39 | $ 23.31 | $ 19.12 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D | .05 | .14 | .22 | .07 | .08G | -I |
Net realized and unrealized gain (loss) | 2.04 | 5.79 | 9.52 | 3.12 | (1.00) | 4.26 |
Total from investment operations | 2.09 | 5.93 | 9.74 | 3.19 | (.92) | 4.26 |
Distributions from net investment income | (.08) | (.14) | (.08) | (.10) | - | (.07) |
Distributions from net realized gain | (1.95) | - | - | - | - | (.01) |
Total distributions | (2.03) | (.14) | (.08) | (.10) | - | (.07)J |
Net asset value, end of period | $ 40.99 | $ 40.93 | $ 35.14 | $ 25.48 | $ 22.39 | $ 23.31 |
Total ReturnB, C | 5.54% | 16.95% | 38.35% | 14.33% | (3.95)% | 22.37% |
Ratios to Average Net Assets E, H |
|
|
|
|
| |
Expenses before reductions | .77%A | .64% | .51% | .66% | .57% | .78% |
Expenses net of fee waivers, if any | .77%A | .64% | .51% | .66% | .57% | .78% |
Expenses net of all reductions | .76%A | .64% | .50% | .65% | .57% | .77% |
Net investment income (loss) | .27%A | .36% | .74% | .29% | .34%G | (.01)% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) | $ 654 | $ 668 | $ 488 | $ 387 | $ 287 | $ 243 |
Portfolio turnover rateF | 54% A | 53% | 59% | 82% | 93% | 103% |
AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .21%. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. IAmount represents less than $.01 per share. JTotal distributions of $.07 per share is comprised of distributions from net investment income of $.067 and distributions from net realized gain of $.005 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended May 31, 2015 (Unaudited)
(Amounts in thousands except percentages)
1. Organization.
Fidelity® Independence Fund (the Fund) is a fund of Fidelity Financial 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 Independence and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee). In accordance
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Investment Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of May 31, 2015 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions, partnerships deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 1,587,168 |
Gross unrealized depreciation | (103,172) |
Net unrealized appreciation (depreciation) on securities | $ 1,483,996 |
|
|
Tax cost | $ 3,603,868 |
New Accounting Pronouncement. In June 2014, the Financial Accounting Standards Board issued Accounting Standard Update No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (the Update). The Update amends the accounting for certain repurchase agreements and expands disclosure requirements for reverse repurchase agreements, securities lending and other similar transactions. The disclosure requirements are effective for annual and interim reporting periods beginning after December 15, 2014. Management is currently evaluating the impact of the Update on the Fund's financial statements and related disclosures.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,304,969 and $1,487,681, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average
Semiannual Report
5. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Independence as compared to its benchmark index, the S&P 500 Index, over the same 36 month performance period. For the reporting period, the total annualized management fee rate, including the performance adjustment, was .69% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Independence. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Independence | $ 2,885 | .14 |
Class K | 154 | .05 |
| $ 3,039 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $18 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except percentages)
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $4 and is reflected in Miscellaneous expenses on the Statement of Operations.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. The value of securities loaned to FCM at period end was $8,615. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $777, including $29 from securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $57 for the period.
In addition, the investment adviser reimbursed a portion of the Fund's operating expenses, including certain Independence expenses during the period in the amount of $4.
Semiannual Report
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income |
|
|
Independence | $ 4,437 | $ 11,770 |
Class K | 1,300 | 1,978 |
Total | $ 5,737 | $ 13,748 |
From net realized gain |
|
|
Independence | $ 201,818 | $ - |
Class K | 31,373 | - |
Total | $ 233,191 | $ - |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Dollars | ||
Six months ended | Year ended | Six months ended | Year ended | |
Independence |
|
|
|
|
Shares sold | 2,841 | 10,786 | $ 113,881 | $ 420,406 |
Reinvestment of distributions | 5,341 | 333 | 202,092 | 11,555 |
Shares redeemed | (6,996) | (14,609) | (278,364) | (564,287) |
Net increase (decrease) | 1,186 | (3,490) | $ 37,609 | $ (132,326) |
Class K |
|
|
|
|
Shares sold | 1,599 | 7,061 | $ 63,917 | $ 274,500 |
Reinvestment of distributions | 863 | 57 | 32,673 | 1,978 |
Shares redeemed | (2,804) | (4,709) | (111,768) | (180,604) |
Net increase (decrease) | (342) | 2,409 | $ (15,178) | $ 95,874 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
FMR Investment Management
(U.K.) Limited
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, Illinois
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®)
1-800-544-5555
Automated line for quickest service
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com
FRE-USAN-0715 1.786813.112
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 Financial 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 Financial 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 Financial Trust
By: | /s/Kenneth B. Robins |
| Kenneth B. Robins |
| President and Treasurer |
|
|
Date: | July 27, 2015 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Kenneth B. Robins |
| Kenneth B. Robins |
| President and Treasurer |
|
|
Date: | July 27, 2015 |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
|
|
Date: | July 27, 2015 |