COMMENTS RECEIVED ON DECEMBER 6, 2004
FROM CHRISTIAN SANDOE
FIDELITY INVESTMENT TRUST (File Nos. 002-90649 and 811-04008)
Fidelity Aggressive International Fund, Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Europe Fund, Fidelity Global Balanced Fund, Fidelity International Discovery Fund, Fidelity International Small Cap Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Worldwide Fund
POST-EFFECTIVE AMENDMENT NO. 89
1. All funds
Performance Charts, Fee Tables, Financial Highlights, and Trustee Compensation Tables (prospectuses and statements of additional information (SAIs))
C: Please submit completed performance charts, fee tables, financial highlights, and the trustee compensation tables when the information becomes available.
R: The requested information will be faxed to you when it becomes available.
2. Fidelity International Discovery, Fidelity China Region Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Latin America Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, Fidelity Global Balanced Fund, Fidelity Diversified International Fund, Fidelity Overseas Fund, Fidelity Worldwide Fund, and Fidelity Aggressive International Fund
"Investment Summary" (prospectuses)
"Principal Investment Risks"
(Fidelity International Discovery, Fidelity Global Balanced Fund, Fidelity Diversified International Fund, Fidelity Overseas Fund, and Fidelity Worldwide Fund)
"Foreign Exposure. Foreign markets,particularly emerging markets, can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market."
(Fidelity China Region Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Latin America Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Aggressive International Fund)
"Foreign Exposure. Foreign markets,particularly emerging markets, can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market. Emerging markets can be subject to greater social, economic, regulatory, and political uncertainties and can be extremely volatile."
Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89
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C: The Staff would like emerging markets added as a strategy under the "Principal Investment Strategies" heading.
R: Though the non-U.S. securities in which the funds invest may include foreign issuers in both developed and emerging markets, these funds currently do not have a principal investment strategy of investing in emerging markets.
3. Fidelity International Discovery Fund, Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Japan Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, Fidelity Diversified International Fund, Fidelity Aggressive International Fund, Fidelity Overseas Fund, and Fidelity Worldwide Fund
"Investment Summary" (prospectuses)
"Principal Investment Strategies"
C: What is the fund's market capitalization strategy?
R: The funds do not have a principal investment strategy of investing in securities of companies with a particular market capitalization.
4. Fidelity International Small Cap Fund
"Investment Summary" (prospectuses)
"Principal Investment Strategies"
"Normally investing at least 80% of assets in securities of companies with small market capitalizations (which, for purposes of this fund, are those companies with market capitalizations of $5 billion or less)."
C: The Staff would like an explanation for why $5 billion or less is a reasonable definition for companies with small market capitalizations.
R: We believe that $5 billion or less is a reasonable definition of companies with small market capitalizations for our international small cap fund and that this definition is appropriately captured in our investment disclosure. As there is no universally accepted definition of "small cap" in the industry and definitions vary widely among the funds, we are comfortable that $5 billion is an appropriate threshold for use by this fund. The $5 billion threshold provides necessary flexibility in the event that the capitalization range of the companies in the index representing the underlying markets should change. For example, as of October 31, 1999, the largest company in the Tokyo Stock Exchange Second Section Stock Price Index (a market capitalization-weighted index that reflects the performance of the smaller, less established and newly listed companies of the Tokyo Stock Exchange) had a market capitalization of $14.1 billion. As of October 31, 2004, the largest company in the Tokyo Stock Exchange Second Section Stock Price Index had a market cap of only $1.9 billion. Wide variations in the capitalization levels of companies in the underlying markets necessitate the use of a broad definition of "small cap." Additionally, because there are several other international funds in the industry that define small cap using a cap threshold of $5 billion or higher, we believe that using a lower threshold would put us at a competitive disadvantage.
Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89
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5. Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Latin America Fund, and Fidelity Nordic Fund
"Investment Summary" (prospectuses)
"Principal Investment Strategies"
(Fidelity Canada Fund)
"Investing up to 35% of total assets in any industry that accounts for more than 20% of the Canadian market."
(Fidelity China Region Fund)
"Investing up to 35% of total assets in any industry that accounts for more than 20% of the Hong Kong, Taiwanese, and Chinese market."
(Fidelity Latin America Fund)
"Investing up to 35% of total assets in any industry that accounts for more than 20% of the Latin American market."
(Fidelity Nordic Fund)
"Investing up to 35% of total assets in any industry that accounts for more than 20% of the Nordic market."
C: Explain how this policy is consistent with Section 8(b)(1) of the Investment Company Act of 1940 (1940 Act) as evidenced by the First Australia no-action letter.
R: As you know, Fidelity had numerous discussions with the SEC Staff in 1999 before this form of fundamental concentration policy was implemented for any of the Fidelity funds. The Fidelity form of policy differs from the policy at issue in the First Australia no-action letter in one respect: the Fidelity funds do not name their benchmark index as part of the fundamental policy. As a result of conversations with the Staff, we are comfortable that the funds' concentration policies nevertheless are consistent with Section 8(b)(1) of the 1940 Act. We specifically discussed with the Staff that the Fidelity funds' benchmark indexes were not a part of their fundamental policies. We explained our concern about naming an index in part of a fundamental policy when at any time an index provider may discontinue the index, stop publishing it, or change the composition of the index. We were advised orally that inclusion of the index name in the fundamental policy was not required; instead it was only one factor in determining if Section 8(b) were satisfied. Currently, each fund uses a cap-weighted index designed by its provider to reflect the performance of the local equity market, and FMR believes the indexes are appropriate measures of the funds' local markets, based on index characteristics including the percentage of the total market capitalization covered, economic sector and industry representation, and the securities that make up each index. FMR could use different indexes or additional indexes to represent the local markets in the future, but only if those indexes were determined to be appropriate based on index characteristics.
6. Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Markets Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, and Fidelity Southeast Asia Fund
"Investment Summary" (prospectuses)
"Principal Investment Risks"
"As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in amore diversified fund."
C: The Staff believes the word "more" should be removed because it suggests gradation. Because a fund is either diversified or non-diversified, as defined by the 1940 Act, a fund cannot be "more diversified."
R: We believe that the disclosure above is stated in plain English pursuant to Rule 421(b)(3) under the Securities Act of 1933. We believe a typical shareholder - presumably unfamiliar with the 1940 Act's defined terms - would understand the term "more diversified" to mean a fund with greater diversity of issuers, regardless of its status as "diversified" or "non-diversified" under the 1940 Act, as even a non-diversified fund is "diversified" to some extent. We do not think the disclosure needs to be modified; however, we would be happy to discuss the Staff's concerns regarding the disclosure in greater detail.
7. Fidelity Japan Smaller Companies Fund
"Investment Summary" (prospectus)
"Principal Investment Strategies"
"Normally investing at least 80% of assets in securities of Japanese issuers, and other investments that are tied economically to Japan, with smaller market capitalizations (which, for purposes of this fund, are those companies with market capitalizations similar to companies in the Russell/Nomura Mid-Small Cap Index or the Japanese Association of Securities Dealers Automated Quotations Index (JASDAQ))."
C: The Staff would like us to add disclosure showing the market capitalization ranges for the Russell/Nomura Mid-Small Cap Index and the Japanese Association of Securities Dealers Automated Quotations Index (JASDAQ) as of a recent date.
R: As the capitalization range of an index varies over time, we believe it is more appropriate to identify well-publicized indices by name rather than giving a snapshot of the capitalization range of an index as of a single date. Therefore, we propose not to modify the disclosure.
8. Fidelity Global Balanced Fund
"Investment Summary" (prospectuses)
"Principal Investment Strategies"
"Investing in equity and debt securities, including lower-quality debt securities, issued anywhere in the world."
C: Are the securities that the fund is invested in securities issued broadly throughout the world and not concentrated in a few countries or regions?
R: As of the fund's October 31, 2004 fiscal year end it was invested in securities issued in over 10 different countries.
9. Fidelity Global Balanced Fund
"Investment Summary" (prospectuses)
"Principal Investment Risks"
C: The Staff notes that there appears to be extra risk disclosure included for this fund.
Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89
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R: The additional disclosure is not necessary and will be removed.
10. Fidelity Overseas Fund
"Investment Summary" (prospectuses)
"Principal Investment Strategies"
"Normally investing at least 80% of assets in non-U.S. securities."
C: Would non-U.S. securities include Canada and Mexico? If so, how is this consistent with the term overseas?
R: We note that the Name Test Rule does not specifically address "overseas" but we see that term as being akin to "foreign," connoting investments tied economically to countries outside the U.S. The SEC has stated that a fund may use any reasonable definition of the terms used in its name and should define the terms used in its name in discussing its investment objectives and strategies in the prospectus. See Name Test Rule Adopting Release Footnote 43. Accordingly, under the heading "Country or Geographic Region" in the "Investment Details" section of the prospectus we disclose that "FMR considers non-U.S. securities to include investments that are tied economically to a particular country or region outside the U.S."
11. All funds
"Fee Table" (prospectuses)
C: The "Shareholder fees" and "Annual operating expenses" information should be presented as one table with all footnotes following the table in its entirety. The Staff believes that inserting footnotes after the "Shareholder fees" information results in two tables instead of one.
R: As we have previously discussed with the Staff, we believe that the information included under the subheadings "Shareholder fees" and "Annual operating expenses" in the "Fee Table" section of the prospectus is presented in a manner consistent with Item 3 of Form N-1A. The footnotes that support the information under each subheading are provided in the closest proximity possible to that information to facilitate shareholder understanding of the information presented. We note that General Instruction C.1(a) to Form N-1A states that a fund should use document design techniques that promote effective communication, and we believe this format most effectively communicates the information presented.
12. All funds
"Fee Table" (prospectuses)
C: The disclosure following the fee table concerning the reimbursement of certain expenses should be set forth as a footnote to the fee table rather than text pursuant to General Instruction C.3(b).
R: The disclosure at issue follows the fee table and a footnote disclosing expense reimbursement arrangements, if any. The disclosure relates both to the total annual operating expenses in the fee table as well as to the footnote disclosing the expense reimbursement arrangements, if any, and the actual annual operating expenses that include the effect of the expense reimbursements. We believe that presenting disclosure in narrative form rather than in an additional footnote to the fee table, or as additional disclosure in the expense reimbursement arrangement footnote, if any, provides a clearer presentation for the shareholder. We believe that the disclosure complies with the requirements of Form N-1A and, accordingly, we propose not to modify it.
13. All funds
"Fee Table" (prospectuses)
"This example illustrates the effect of fees and expenses, but is not meant to suggest actual or expected fees and expenses or returns, all of which may vary."
C: The Staff notes that it seems the fee table is based on last year's expenses or upcoming fees and expenses. Why doesn't the example illustrate actual or expected fees or expenses?
R: As instructed in Item 3 of Form N-1A, the percentage of "Annual Fund Operating Expenses" is based on amounts incurred during a fund's most recent fiscal year. The example following the fee table is calculated using the exact fees disclosed in the fee table. The disclosure at issue is meant to clarify that because the fee table is calculated as of a fund's most recently completed fiscal year end, "actual" expenses for the current (ongoing) fiscal year will not be reflected until after the close of the fiscal year. In addition, the disclosure also clarifies that each investor's specific fees, expenses (and returns) typically will vary from what is illustrated by the example.
14. All funds
"Investment Details" (prospectuses)
"Principal Investment Strategies"
"In addition to the principal investment strategies discussed above, FMR may lend the fund's securities to broker-dealers or other institutions to earn income for the fund.
FMR may also use various techniques, such as buying and selling futures contracts and exchange traded funds, to increase or decrease the fund's exposure to changing security prices or other factors that affect security values. If FMR's strategies do not work as intended, the fund may not achieve its objective."
C: The Staff requests that we add these techniques to the risk/return summary, or if they are not principal, delete them from this section.
R: Item 2 of Form N-1A requires that the risk/return summary be limited to disclosure of the fund's "principal" investment strategies and "principal" risks. The techniques identified in the disclosure at issue are not currently considered "principal" strategies for the funds, and therefore we have not added them to the risk/return summary.
We believe that the phrase "In addition to the principal investment strategies discussed above," added to disclosure pursuant to the Staff's previous comments, adequately conveys that the strategies that follow are not currently considered principal. In addition, General Instruction C.(3)(b) permits a fund to include in its prospectus (except in the Item 2 and Item 3 sections of the prospectus) information that is not otherwise required, provided the information is not incomplete, inaccurate, or misleading, and the disclosure does not obscure or impede understanding of the information that is required to be included. We feel the disclosure provides shareholders with additional significant information about the funds' strategies.
Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89
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15. Fidelity International Small Cap Fund and Fidelity Japan Smaller Companies Fund
"Investment Details" (prospectus)
"Principal Investment Strategies"
(Fidelity International Small Cap Fund)
"FMR normally invests at least 80% of the fund's assets in securities of companies with small market capitalizations. Although a universal definition of small market capitalization companies does not exist, for purposes of this fund, FMR generally defines small market capitalization companies as those with market capitalizations of $5 billion or less. A company's market capitalization is based on its current market capitalization or its market capitalization at the time of the fund's investment.Companies whose capitalization is above this level after purchase continue to be considered to have a small market capitalization for purposes of the 80% policy. FMR normally invests the fund's assets primarily in common stocks."
(Fidelity Japan Smaller Companies Fund)
"FMR normally invests at least 80% of the fund's assets in securities of Japanese issuers, and other investments that are tied economically to Japan, with smaller market capitalizations. For purposes of this fund, FMR defines smaller market capitalization issuers as those whose market capitalization is similar to the market capitalization of companies in the Russell/Nomura Mid-Small Cap Index or the JASDAQ. A company's market capitalization is based on its current market capitalization or its market capitalization at the time of the fund's investment. Companies whose capitalization is above this level after purchase continue to be considered to have a smaller market capitalization for purposes of the 80% policy. The size of the companies in each index changes with market conditions and the composition of the index. FMR may also invest the fund's assets in Japanese issuers with larger market capitalizations. FMR normally invests the fund's assets primarily in common stocks."
C: The Staff would like us to confirm that any securities that are no longer characterized as small cap after purchase will not continue to be counted toward the fund's 80% name test and that we will purchase small cap securities (small cap funds) to bring the fund back into compliance with the name test.
R: The 80% investment requirement applies at the time a fund invests its assets, which, as the Name Test Rule proposing release notes, is consistent with other investment requirements under the 1940 Act. Therefore, if a security meets the 80% name test requirement at the time of purchase, any subsequent changes in net assets or other circumstances will not be considered when determining whether the investment complies with the fund's investment policies. Additional purchases of a security that was characterized as small cap at the time of initial purchase but that is no longer so characterized would not be counted toward the fund's 80% name test. In addition, if at the time of the proposed investment the fund no longer met its 80% investment requirement, the fund, as the Name Test Rule requires, would make future investments in a manner that would bring it into compliance with the 80% requirement.
16. Fidelity Emerging Markets Fund and Fidelity Global Balanced Fund
"Investment Details" (prospectuses)
"Description of Principal Security Types"
(Fidelity Emerging Markets Fund)
"Debt securities are used by issuers to borrow money. The issuer usually pays a fixed, variable, or floating rate of interest, and must repay the amount borrowed, usually at the maturity of the security. Some debt securities, such as zero coupon bonds, do not pay current interest but are sold at a discount from their face values.Debt securities include corporate bonds, government securities, repurchase agreements, mortgage and other asset-backed securities, loans and loan participations, and other securities that FMR believes have debt-like characteristics, including hybrids and synthetic securities."
(Fidelity Global Balanced Fund)
"Debt securities are used by issuers to borrow money. The issuer usually pays a fixed, variable, or floating rate of interest, and must repay the amount borrowed, usually at the maturity of the security. Some debt securities, such as zero coupon bonds, do not pay current interest but are sold at a discount from their face values. Debt securities include corporate bonds, government securities, repurchase agreements, mortgage and other asset-backed securities, and other securities that FMR believes have debt-like characteristics, including hybrids and synthetic securities."
C: Modify the underlined sentence to reflect that hybrids and synthetic securities are not debt securities.
R: Where instruments (or a combination of instruments viewed as a unit) are issued to borrow money and otherwise have characteristics of debt securities, we believe it is reasonable to characterize them as debt. Therefore we have not made the requested change.
17. Fidelity Aggressive International Fund, Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Europe Fund, Fidelity Global Balanced Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Worldwide Fund
"Investment Details" (prospectuses)
"Principal Investment Risks"
C: The Staff requests that we identify specifically which risks apply to which funds and change "a fund's" to reflect this identification.
R: As we have discussed with the Staff previously, we believe that the disclosure complies with General Instruction C(3)(c)(i) of Form N-1A, which requires multiple fund prospectuses to present disclosure "in a format designed to communicate the information effectively." The risk disclosure in "Investment Details" section is organized and presented in a readable and comprehensive fashion which effectively communicates the risks unique to the funds. Therefore we have not modified our disclosure.
18. All funds
"Valuing Shares" (prospectuses)
"The fund may invest in other Fidelity funds that use the same fair value pricing policies as the fund or in Fidelity money market funds."
C: The Staff questions how the funds may invest in other Fidelity funds when they are not funds of funds. Do the funds have exemptive relief to do so?
R: Fidelity has received two exemptive orders relating to investments in other funds: Investment Company Act Release No. 23943, dated August 11, 1999 and Investment Company Act Release No. 24385, dated April 10, 2000.
Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89
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19. All funds (except Advisor International Small Cap Fund Class A, T, B, and C and Institutional Class of Fidelity International Small Cap Fund)
"Buying and Selling Shares" (prospectuses)
C: The Staff would like to understand what is meant by the terms "prototype retirement accounts" and "non-prototype retirement accounts." Additional disclosure is not necessary if Fidelity's customers understand the terms in the context they are used.
R: Qualified plan customers at Fidelity can establish accounts under a Fidelity prototype retirement plan document (prototype retirement accounts). Customers can also establish qualified plans that invest in Fidelity funds, but are not administered by a Fidelity affiliate and a Fidelity affiliate does not act as a plan Trustee. These accounts are considered "non-prototype retirement accounts" because they do not use Fidelity's prototype retirement plan documentation. These terms are understood by the applicable customer base. No changes will be made to disclosure.
20. All funds
"Board Approval of Existing Investment Advisory Contracts" (SAIs)
C: The Staff believes that consistent with the second sentence of the Instruction to Item 12(b)(10) of Form N-1A, additional disclosure is needed in this section to relate the factors to the specific circumstances of a fund and the investment advisory contract. Specifically, in the discussion of a fund's performance and expenses, the Staff suggests that we consider adding numerical comparisons of a fund's performance and expenses to an applicable peer group of similar funds.
R: We have submitted to the Staff a proposal that addresses the Staff's request to add fund-specific numerical performance and expense data to the disclosure. In light of the SEC's adoption in June 2004 of the final rule concerning the approval of investment advisory contracts, we are working on revised disclosure to comply with the rule and expect to have additional discussion with the Staff about this disclosure
21. All funds
"Proxy Voting Guidelines" (SAIs)
"The FMR Legal Department consults with the appropriate analysts or portfolio managers regarding the voting decisions of non-routine proposals that are not addressed by the Proxy Voting Guidelines.Each of the President or General Counsel of FMR or the General Counsel of FMR Corp is authorized to take a final decision."
C: The Staff believes that the disclosure is sufficient to communicate how conflicts of interest are avoided, but requests that we add disclosure addressing how an identified conflict of interest would be handled.
R: In a future review of the Proxy Voting Guidelines with the Board of Trustees, we expect to propose adding disclosure as the Staff suggests.
22. All funds
Tandy (prospectuses and SAIs)
C: The Staff would like us to affirm the following three statements:
1) The fund is responsible for the adequacy and accuracy of the disclosure in the filings.
2) Staff comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filing.
3) The fund may not assert Staff comments as a defense in any proceeding initiated by the Commission or any other person under the Federal Securities Laws.
R: We affirm the aforementioned statements.
