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 811-4008
Fidelity Investment Trust
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Marc Bryant, Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code:
617-563-7000
| |
Date of fiscal year end: | October 31 |
| |
Date of reporting period: | October 31, 2016 |
This report on Form N-CSR relates solely to the Registrant’s Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Asia Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund and Fidelity Pacific Basin Fund (each, a “Fund” and collectively, the “Funds”).
Item 1.
Reports to Stockholders
Fidelity Advisor® Canada Fund - Class A, Class T, Class C and Class I
Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® Canada Fund |
 |
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 1.27% | 0.72% | 2.03% |
| Class T (incl. 3.50% sales charge) | 3.39% | 0.90% | 1.99% |
| Class C (incl. contingent deferred sales charge) | 5.67% | 1.17% | 1.91% |
| Class I | 7.83% | 2.24% | 2.92% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on May 2, 2007. Returns prior to May 2, 2007, are those of Fidelity® Canada Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to May 2, 2007, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on May 2, 2007. Returns prior to May 2, 2007, are those of Fidelity® Canada Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to May 2, 2007, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on May 2, 2007. Returns prior to May 2, 2007, are those of Fidelity® Canada Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to May 2, 2007, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on May 2, 2007. Returns prior to May 2, 2007 are those of Fidelity® Canada Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Canada Fund - Class A on October 31, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the S&P/TSX Composite Index performed over the same period.
See above for additional information regarding the performance of Class A.
| Period Ending Values |
| $12,225 | Fidelity Advisor® Canada Fund - Class A |
| $13,408 | S&P/TSX Composite Index |
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Risteard Hogan: For the one-year period ending October 31, 2016, the fund’s share classes (excluding sales charges, if applicable) posted strong gains, but lagged the 10.03% result of the fund’s benchmark S&P/TSX Composite Index by about 2 to 3 percentage points. The period was marked by persistent volatility, driven by the bottoming-out of the commodities market and the subsequent rebound, which lifted stocks of many Canadian companies with exposure to materials and oil. Stock selection drove the underperformance relative to the S&P/TSX index overall, most notably in the materials sector. The fund’s biggest individual detractor was an average underweighting in miner Barrick Gold. I did not own this stock early in the period, and the fund missed out on its rally when commodities began to rise in late January. Our modestly overweighted stake in miner Detour Gold also hurt our relative results. The stock suffered after heavy rains flooded Detour’s gold mine, causing a shortfall in production. Conversely, stock selection in consumer discretionary proved beneficial, led by the fund’s position in home improvement retailer Rona. In February, U.S.-based competitor Lowe’s made a $2 billion acquisition bid for Rona, and its stock price doubled. I subsequently sold the position to take profits.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Canada | 93.2% |
| | United States of America* | 3.8% |
| | Bailiwick of Jersey | 0.9% |
| | United Kingdom | 0.8% |
| | France | 0.5% |
| | Ireland | 0.4% |
| | Israel | 0.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Canada | 94.1% |
| | United States of America* | 3.0% |
| | United Kingdom | 0.9% |
| | Bailiwick of Jersey | 0.8% |
| | France | 0.4% |
| | Israel | 0.3% |
| | Ireland | 0.3% |
| | Netherlands | 0.2% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 97.0 | 98.0 |
| Short-Term Investments and Net Other Assets (Liabilities) | 3.0 | 2.0 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Royal Bank of Canada (Banks) | 9.3 | 10.0 |
| The Toronto-Dominion Bank (Banks) | 8.7 | 9.2 |
| Suncor Energy, Inc. (Oil, Gas & Consumable Fuels) | 5.4 | 5.1 |
| Canadian National Railway Co. (Road & Rail) | 5.4 | 5.5 |
| Enbridge, Inc. (Oil, Gas & Consumable Fuels) | 4.1 | 3.4 |
| Rogers Communications, Inc. Class B (non-vtg.) (Wireless Telecommunication Services) | 3.7 | 3.3 |
| Sun Life Financial, Inc. (Insurance) | 3.6 | 2.9 |
| TELUS Corp. (Diversified Telecommunication Services) | 2.9 | 3.0 |
| Bank of Nova Scotia (Banks) | 2.9 | 2.3 |
| Alimentation Couche-Tard, Inc. Class B (sub. vtg.) (Food & Staples Retailing) | 2.4 | 1.8 |
| | 48.4 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Financials | 31.1 | 33.3 |
| Energy | 21.8 | 20.9 |
| Materials | 13.7 | 13.8 |
| Consumer Staples | 7.4 | 8.3 |
| Industrials | 7.4 | 7.2 |
| Telecommunication Services | 6.6 | 6.5 |
| Information Technology | 4.6 | 3.8 |
| Consumer Discretionary | 2.5 | 3.1 |
| Real Estate | 0.8 | 0.0 |
| Utilities | 0.7 | 0.4 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Canadian market. As of October 31, 2016, the Fund did not have more than 25% of its total assets invested in any one industry.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 97.0% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 2.5% | | | |
| Auto Components - 0.1% | | | |
| Magna International, Inc. Class A (sub. vtg.) | | 57,500 | $2,360,788 |
| Media - 1.8% | | | |
| Cogeco Communications, Inc. | | 189,000 | 8,815,209 |
| Corus Entertainment, Inc. Class B (non-vtg.) | | 588,000 | 4,852,874 |
| Quebecor, Inc. Class B (sub. vtg.) | | 378,200 | 10,613,172 |
| | | | 24,281,255 |
| Specialty Retail - 0.6% | | | |
| AutoCanada, Inc. | | 255,900 | 4,206,811 |
| Sleep Country Canada Holdings, Inc. | | 177,300 | 3,768,600 |
| | | | 7,975,411 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 34,617,454 |
|
| CONSUMER STAPLES - 7.4% | | | |
| Beverages - 0.4% | | | |
| Molson Coors Brewing Co. Class B | | 50,300 | 5,221,643 |
| Food & Staples Retailing - 6.3% | | | |
| Alimentation Couche-Tard, Inc. Class B (sub. vtg.) | | 640,800 | 32,190,490 |
| Empire Co. Ltd. Class A (non-vtg.) | | 228,300 | 3,288,419 |
| George Weston Ltd. | | 296,400 | 24,153,075 |
| Jean Coutu Group, Inc. Class A (sub. vtg.) | | 395,700 | 5,959,248 |
| Metro, Inc. Class A (sub. vtg.) | | 387,395 | 11,974,500 |
| North West Co., Inc. | | 350,200 | 6,683,904 |
| | | | 84,249,636 |
| Food Products - 0.2% | | | |
| AGT Food & Ingredients, Inc. | | 103,100 | 2,931,659 |
| Tobacco - 0.5% | | | |
| Imperial Tobacco Group PLC | | 152,745 | 7,395,198 |
|
| TOTAL CONSUMER STAPLES | | | 99,798,136 |
|
| ENERGY - 21.8% | | | |
| Energy Equipment & Services - 1.1% | | | |
| Canadian Energy Services & Technology Corp. | | 1,773,500 | 6,994,569 |
| Pason Systems, Inc. | | 374,300 | 4,255,629 |
| ZCL Composites, Inc. | | 455,600 | 3,970,748 |
| | | | 15,220,946 |
| Oil, Gas & Consumable Fuels - 20.7% | | | |
| ARC Resources Ltd. (a) | | 826,300 | 14,027,325 |
| Canadian Natural Resources Ltd. | | 842,998 | 26,754,958 |
| Cenovus Energy, Inc. | | 1,629,000 | 23,500,447 |
| Enbridge, Inc. | | 1,268,800 | 54,789,306 |
| Imperial Oil Ltd. | | 560,400 | 18,174,458 |
| Keyera Corp. | | 207,404 | 6,225,367 |
| NuVista Energy Ltd. (b) | | 831,200 | 4,226,336 |
| Painted Pony Petroleum Ltd. (b) | | 740,200 | 4,536,229 |
| Parkland Fuel Corp. | | 372,600 | 8,703,167 |
| Peyto Exploration & Development Corp. | | 445,000 | 11,432,715 |
| PrairieSky Royalty Ltd. (a) | | 609,118 | 13,246,829 |
| Raging River Exploration, Inc. (b) | | 865,700 | 6,938,250 |
| Spartan Energy Corp. (b) | | 2,184,800 | 5,082,067 |
| Suncor Energy, Inc. | | 2,425,100 | 72,772,888 |
| Whitecap Resources, Inc. | | 982,700 | 7,853,980 |
| | | | 278,264,322 |
|
| TOTAL ENERGY | | | 293,485,268 |
|
| FINANCIALS - 31.1% | | | |
| Banks - 20.9% | | | |
| Bank of Nova Scotia | | 741,000 | 39,820,532 |
| Royal Bank of Canada | | 2,002,700 | 125,122,089 |
| The Toronto-Dominion Bank | | 2,571,100 | 116,660,811 |
| | | | 281,603,432 |
| Capital Markets - 1.5% | | | |
| Amundi SA | | 125,500 | 6,150,636 |
| Brookfield Asset Management, Inc. Class A | | 210,400 | 7,367,843 |
| TMX Group Ltd. | | 152,700 | 7,045,853 |
| | | | 20,564,332 |
| Diversified Financial Services - 0.5% | | | |
| Element Financial Corp. | | 778,800 | 7,588,844 |
| Insurance - 8.2% | | | |
| Fairfax Financial Holdings Ltd. (sub. vtg.) | | 28,800 | 14,749,989 |
| Intact Financial Corp. | | 317,325 | 21,571,381 |
| Power Corp. of Canada (sub. vtg.) | | 1,190,900 | 25,544,019 |
| Sun Life Financial, Inc. | | 1,442,700 | 48,283,608 |
| | | | 110,148,997 |
|
| TOTAL FINANCIALS | | | 419,905,605 |
|
| HEALTH CARE - 0.4% | | | |
| Pharmaceuticals - 0.4% | | | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | | 119,500 | 5,107,430 |
| INDUSTRIALS - 7.4% | | | |
| Airlines - 0.5% | | | |
| WestJet Airlines Ltd. | | 400,400 | 6,552,434 |
| Professional Services - 0.6% | | | |
| Stantec, Inc. | | 347,600 | 7,733,083 |
| Road & Rail - 5.9% | | | |
| Canadian National Railway Co. | | 1,148,400 | 72,193,460 |
| TransForce, Inc. | | 307,400 | 6,973,967 |
| | | | 79,167,427 |
| Trading Companies & Distributors - 0.4% | | | |
| Toromont Industries Ltd. | | 205,000 | 6,021,770 |
|
| TOTAL INDUSTRIALS | | | 99,474,714 |
|
| INFORMATION TECHNOLOGY - 4.6% | | | |
| IT Services - 1.6% | | | |
| CGI Group, Inc. Class A (sub. vtg.) (b) | | 465,800 | 22,124,892 |
| Semiconductors & Semiconductor Equipment - 0.3% | | | |
| Dialog Semiconductor PLC (b) | | 89,400 | 3,508,464 |
| Software - 2.7% | | | |
| Constellation Software, Inc. | | 41,000 | 19,207,001 |
| Open Text Corp. | | 271,814 | 16,876,664 |
| | | | 36,083,665 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 61,717,021 |
|
| MATERIALS - 13.7% | | | |
| Chemicals - 2.4% | | | |
| Agrium, Inc. | | 290,300 | 26,649,250 |
| Monsanto Co. | | 55,600 | 5,602,812 |
| | | | 32,252,062 |
| Construction Materials - 0.4% | | | |
| CRH PLC | | 174,300 | 5,658,486 |
| Containers & Packaging - 0.9% | | | |
| CCL Industries, Inc. Class B | | 68,500 | 12,182,204 |
| Metals & Mining - 9.4% | | | |
| Agnico Eagle Mines Ltd. (Canada) | | 439,700 | 22,330,846 |
| Barrick Gold Corp. | | 364,200 | 6,408,052 |
| Detour Gold Corp. (b) | | 548,000 | 10,446,850 |
| Franco-Nevada Corp. | | 299,000 | 19,569,977 |
| Labrador Iron Ore Royalty Corp. (a) | | 569,900 | 6,241,580 |
| Lundin Mining Corp. (b) | | 2,315,100 | 9,061,563 |
| Randgold Resources Ltd. | | 139,064 | 12,349,798 |
| Silver Wheaton Corp. | | 730,200 | 17,594,918 |
| Tahoe Resources, Inc. | | 825,200 | 9,892,803 |
| Teck Resources Ltd. Class B (sub. vtg.) | | 311,800 | 6,732,072 |
| Torex Gold Resources, Inc. (b) | | 321,470 | 5,979,778 |
| | | | 126,608,237 |
| Paper & Forest Products - 0.6% | | | |
| Western Forest Products, Inc. | | 5,001,100 | 7,606,236 |
|
| TOTAL MATERIALS | | | 184,307,225 |
|
| REAL ESTATE - 0.8% | | | |
| Equity Real Estate Investment Trusts (REITs) - 0.8% | | | |
| Allied Properties (REIT) | | 396,700 | 10,665,028 |
| TELECOMMUNICATION SERVICES - 6.6% | | | |
| Diversified Telecommunication Services - 2.9% | | | |
| TELUS Corp. | | 1,233,900 | 39,952,492 |
| Wireless Telecommunication Services - 3.7% | | | |
| Rogers Communications, Inc. Class B (non-vtg.) | | 1,237,000 | 49,764,050 |
|
| TOTAL TELECOMMUNICATION SERVICES | | | 89,716,542 |
|
| UTILITIES - 0.7% | | | |
| Electric Utilities - 0.7% | | | |
| Hydro One Ltd. | | 502,700 | 9,171,005 |
| TOTAL COMMON STOCKS | | | |
| (Cost $1,060,078,806) | | | 1,307,965,428 |
|
| Money Market Funds - 4.0% | | | |
| Fidelity Cash Central Fund, 0.41% (c) | | 36,919,274 | 36,930,350 |
| Fidelity Securities Lending Cash Central Fund 0.48% (c)(d) | | 16,423,546 | 16,426,831 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $53,348,323) | | | 53,357,181 |
| TOTAL INVESTMENT PORTFOLIO - 101.0% | | | |
| (Cost $1,113,427,129) | | | 1,361,322,609 |
| NET OTHER ASSETS (LIABILITIES) - (1.0)% | | | (13,283,481) |
| NET ASSETS - 100% | | | $1,348,039,128 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $113,081 |
| Fidelity Securities Lending Cash Central Fund | 1,440,259 |
| Total | $1,553,340 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $34,617,454 | $34,617,454 | $-- | $-- |
| Consumer Staples | 99,798,136 | 99,798,136 | -- | -- |
| Energy | 293,485,268 | 293,485,268 | -- | -- |
| Financials | 419,905,605 | 419,905,605 | -- | -- |
| Health Care | 5,107,430 | 5,107,430 | -- | -- |
| Industrials | 99,474,714 | 99,474,714 | -- | -- |
| Information Technology | 61,717,021 | 61,717,021 | -- | -- |
| Materials | 184,307,225 | 166,298,941 | 18,008,284 | -- |
| Real Estate | 10,665,028 | 10,665,028 | -- | -- |
| Telecommunication Services | 89,716,542 | 89,716,542 | -- | -- |
| Utilities | 9,171,005 | 9,171,005 | -- | -- |
| Money Market Funds | 53,357,181 | 53,357,181 | -- | -- |
| Total Investments in Securities: | $1,361,322,609 | $1,343,314,325 | $18,008,284 | $-- |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $15,496,692) — See accompanying schedule:
Unaffiliated issuers (cost $1,060,078,806) | $1,307,965,428 | |
| Fidelity Central Funds (cost $53,348,323) | 53,357,181 | |
| Total Investments (cost $1,113,427,129) | | $1,361,322,609 |
| Foreign currency held at value (cost $322,027) | | 322,012 |
| Receivable for investments sold | | 5,446,147 |
| Receivable for fund shares sold | | 517,222 |
| Dividends receivable | | 2,275,466 |
| Distributions receivable from Fidelity Central Funds | | 194,865 |
| Prepaid expenses | | 3,620 |
| Other receivables | | 22,731 |
| Total assets | | 1,370,104,672 |
| Liabilities | | |
| Payable for investments purchased | $1,904,493 | |
| Payable for fund shares redeemed | 2,403,488 | |
| Accrued management fee | 933,753 | |
| Distribution and service plan fees payable | 29,658 | |
| Other affiliated payables | 301,766 | |
| Other payables and accrued expenses | 66,456 | |
| Collateral on securities loaned, at value | 16,425,930 | |
| Total liabilities | | 22,065,544 |
| Net Assets | | $1,348,039,128 |
| Net Assets consist of: | | |
| Paid in capital | | $1,132,107,522 |
| Undistributed net investment income | | 13,430,443 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (45,390,587) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 247,891,750 |
| Net Assets | | $1,348,039,128 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($44,143,668 ÷ 917,909 shares) | | $48.09 |
| Maximum offering price per share (100/94.25 of $48.09) | | $51.02 |
| Class T: | | |
| Net Asset Value and redemption price per share ($11,139,837 ÷ 232,955 shares) | | $47.82 |
| Maximum offering price per share (100/96.50 of $47.82) | | $49.55 |
| Class C: | | |
| Net Asset Value and offering price per share ($18,488,751 ÷ 394,450 shares)(a) | | $46.87 |
| Canada: | | |
| Net Asset Value, offering price and redemption price per share ($1,233,050,086 ÷ 25,500,126 shares) | | $48.35 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($41,216,786 ÷ 853,627 shares) | | $48.28 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $36,030,694 |
| Income from Fidelity Central Funds | | 1,553,340 |
| Income before foreign taxes withheld | | 37,584,034 |
| Less foreign taxes withheld | | (5,201,439) |
| Total income | | 32,382,595 |
| Expenses | | |
| Management fee | | |
| Basic fee | $8,884,225 | |
| Performance adjustment | 2,391,451 | |
| Transfer agent fees | 2,923,404 | |
| Distribution and service plan fees | 374,493 | |
| Accounting and security lending fees | 586,540 | |
| Custodian fees and expenses | 24,761 | |
| Independent trustees' fees and expenses | 5,552 | |
| Registration fees | 82,165 | |
| Audit | 77,777 | |
| Legal | 6,773 | |
| Miscellaneous | 12,106 | |
| Total expenses before reductions | 15,369,247 | |
| Expense reductions | (62,846) | 15,306,401 |
| Net investment income (loss) | | 17,076,194 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (33,075,291) | |
| Fidelity Central Funds | 1,430 | |
| Other affiliated issuers | 813,420 | |
| Foreign currency transactions | (327,888) | |
| Total net realized gain (loss) | | (32,588,329) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 98,517,932 | |
| Assets and liabilities in foreign currencies | 12,526 | |
| Total change in net unrealized appreciation (depreciation) | | 98,530,458 |
| Net gain (loss) | | 65,942,129 |
| Net increase (decrease) in net assets resulting from operations | | $83,018,323 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $17,076,194 | $20,629,341 |
| Net realized gain (loss) | (32,588,329) | (6,996,196) |
| Change in net unrealized appreciation (depreciation) | 98,530,458 | (283,157,405) |
| Net increase (decrease) in net assets resulting from operations | 83,018,323 | (269,524,260) |
| Distributions to shareholders from net investment income | (17,462,078) | (24,029,674) |
| Distributions to shareholders from net realized gain | (1,771,774) | (262,730,704) |
| Total distributions | (19,233,852) | (286,760,378) |
| Share transactions - net increase (decrease) | (105,554,211) | (304,156,881) |
| Redemption fees | 81,286 | 128,345 |
| Total increase (decrease) in net assets | (41,688,454) | (860,313,174) |
| Net Assets | | |
| Beginning of period | 1,389,727,582 | 2,250,040,756 |
| End of period | $1,348,039,128 | $1,389,727,582 |
| Other Information | | |
| Undistributed net investment income end of period | $13,430,443 | $14,473,984 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $45.25 | $60.56 | $57.31 | $53.65 | $52.20 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .48 | .45 | .47 | .60 | .57 |
| Net realized and unrealized gain (loss) | 2.84 | (8.04) | 3.13 | 3.63 | 1.50 |
| Total from investment operations | 3.32 | (7.59) | 3.60 | 4.23 | 2.07 |
| Distributions from net investment income | (.42) | (.50) | (.03) | (.57) | (.33) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.48) | (7.72) | (.35) | (.57) | (.62) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.09 | $45.25 | $60.56 | $57.31 | $53.65 |
| Total ReturnC,D | 7.45% | (14.32)% | 6.32% | 7.98% | 4.04% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.48% | 1.43% | 1.29% | 1.19% | 1.08% |
| Expenses net of fee waivers, if any | 1.48% | 1.43% | 1.29% | 1.19% | 1.08% |
| Expenses net of all reductions | 1.48% | 1.43% | 1.29% | 1.18% | 1.08% |
| Net investment income (loss) | 1.06% | .90% | .79% | 1.11% | 1.11% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $44,144 | $58,286 | $95,004 | $116,661 | $159,597 |
| Portfolio turnover rateG | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $44.99 | $60.22 | $57.14 | $53.48 | $52.01 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .35 | .29 | .29 | .45 | .43 |
| Net realized and unrealized gain (loss) | 2.83 | (8.00) | 3.11 | 3.63 | 1.49 |
| Total from investment operations | 3.18 | (7.71) | 3.40 | 4.08 | 1.92 |
| Distributions from net investment income | (.29) | (.30) | – | (.42) | (.16) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.35) | (7.52) | (.32) | (.42) | (.45) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $47.82 | $44.99 | $60.22 | $57.14 | $53.48 |
| Total ReturnC,D | 7.14% | (14.58)% | 5.99% | 7.69% | 3.74% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.77% | 1.75% | 1.59% | 1.47% | 1.36% |
| Expenses net of fee waivers, if any | 1.77% | 1.75% | 1.59% | 1.47% | 1.36% |
| Expenses net of all reductions | 1.77% | 1.75% | 1.59% | 1.46% | 1.36% |
| Net investment income (loss) | .78% | .58% | .48% | .83% | .83% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $11,140 | $12,820 | $21,989 | $23,751 | $29,626 |
| Portfolio turnover rateG | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $44.02 | $59.04 | $56.27 | $52.61 | $51.19 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .15 | .07 | .02 | .20 | .19 |
| Net realized and unrealized gain (loss) | 2.78 | (7.85) | 3.07 | 3.58 | 1.46 |
| Total from investment operations | 2.93 | (7.78) | 3.09 | 3.78 | 1.65 |
| Distributions from net investment income | (.02) | (.02) | – | (.12) | – |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.23) |
| Total distributions | (.08) | (7.24) | (.32) | (.12) | (.23) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $46.87 | $44.02 | $59.04 | $56.27 | $52.61 |
| Total ReturnC,D | 6.67% | (14.96)% | 5.53% | 7.21% | 3.26% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 2.21% | 2.19% | 2.03% | 1.93% | 1.82% |
| Expenses net of fee waivers, if any | 2.21% | 2.19% | 2.03% | 1.92% | 1.82% |
| Expenses net of all reductions | 2.21% | 2.18% | 2.03% | 1.92% | 1.82% |
| Net investment income (loss) | .33% | .14% | .04% | .37% | .37% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $18,489 | $21,610 | $38,749 | $46,040 | $66,500 |
| Portfolio turnover rateG | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $45.55 | $60.95 | $57.72 | $54.05 | $52.59 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .62 | .60 | .66 | .77 | .73 |
| Net realized and unrealized gain (loss) | 2.85 | (8.09) | 3.13 | 3.66 | 1.51 |
| Total from investment operations | 3.47 | (7.49) | 3.79 | 4.43 | 2.24 |
| Distributions from net investment income | (.61) | (.69) | (.24) | (.76) | (.49) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.67) | (7.91) | (.56) | (.76) | (.78) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.35 | $45.55 | $60.95 | $57.72 | $54.05 |
| Total ReturnC | 7.79% | (14.08)% | 6.64% | 8.32% | 4.36% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.17% | 1.15% | .98% | .87% | .77% |
| Expenses net of fee waivers, if any | 1.17% | 1.15% | .98% | .87% | .77% |
| Expenses net of all reductions | 1.17% | 1.14% | .98% | .86% | .77% |
| Net investment income (loss) | 1.37% | 1.18% | 1.09% | 1.42% | 1.42% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,233,050 | $1,279,488 | $2,057,843 | $2,262,380 | $2,992,597 |
| Portfolio turnover rateF | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $45.44 | $60.80 | $57.57 | $53.91 | $52.44 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .66 | .61 | .65 | .78 | .74 |
| Net realized and unrealized gain (loss) | 2.83 | (8.07) | 3.12 | 3.64 | 1.50 |
| Total from investment operations | 3.49 | (7.46) | 3.77 | 4.42 | 2.24 |
| Distributions from net investment income | (.59) | (.68) | (.22) | (.76) | (.48) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.65) | (7.90) | (.54) | (.76) | (.77) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.28 | $45.44 | $60.80 | $57.57 | $53.91 |
| Total ReturnC | 7.83% | (14.05)% | 6.62% | 8.34% | 4.38% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.14% | 1.13% | 1.00% | .86% | .76% |
| Expenses net of fee waivers, if any | 1.13% | 1.12% | 1.00% | .86% | .76% |
| Expenses net of all reductions | 1.13% | 1.12% | 1.00% | .85% | .76% |
| Net investment income (loss) | 1.41% | 1.21% | 1.08% | 1.43% | 1.42% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $41,217 | $14,846 | $30,165 | $30,831 | $59,245 |
| Portfolio turnover rateF | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Canada Fund (the Fund) is a fund of Fidelity Investment 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, Canada and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, capital loss carryforwards, deferred trustees compensation 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 | $305,552,511 |
| Gross unrealized depreciation | (70,218,263) |
| Net unrealized appreciation (depreciation) on securities | $235,334,248 |
| Tax Cost | $1,125,988,361 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $18,548,465 |
| Capital loss carryforward | $(37,937,420) |
| Net unrealized appreciation (depreciation) on securities and other investments | $235,320,823 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(3,213,379) |
| Long-term | (34,724,041) |
| Total capital loss carryforward | $(37,937,420) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $17,462,078 | $ 24,029,674 |
| Long-term Capital Gains | 1,771,775 | 262,730,704 |
| Total | $19,233,853 | $ 286,760,378 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $548,563,418 and $674,318,641, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Canada as compared to its benchmark index, the S&P/TSX Composite Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .88% 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
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $115,855 | $– |
| Class T | .25% | .25% | 55,454 | – |
| Class B | .75% | .25% | 14,092 | 10,569 |
| Class C | .75% | .25% | 189,092 | 9,902 |
| | | | $374,493 | $20,471 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $6,909 |
| Class T | 2,394 |
| Class B(a) | 1,499 |
| Class C(a) | 1,244 |
| | $12,046 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $133,275 | .29 |
| Class T | 35,874 | .32 |
| Class B | 3,959 | .28 |
| Class C | 50,278 | .27 |
| Canada | 2,660,970 | .23 |
| Class I | 39,048 | .19 |
| | $2,923,404 | |
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 $418 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $3,256 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $1,440,259, including $2,028 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 $53,977 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund level operating expenses in the amount of $8,869.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $482,934 | $783,478 |
| Class T | 79,315 | 106,245 |
| Class C | 8,502 | 12,920 |
| Canada | 16,735,044 | 22,800,214 |
| Class I | 156,283 | 326,817 |
| Total | $17,462,078 | $24,029,674 |
| From net realized gain | | |
| Class A | $69,321 | $11,358,847 |
| Class T | 16,639 | 2,548,483 |
| Class B | 3,460 | 742,098 |
| Class C | 28,339 | 4,664,328 |
| Canada | 1,638,014 | 239,967,215 |
| Class I | 16,001 | 3,449,733 |
| Total | $1,771,774 | $262,730,704 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 134,113 | 153,407 | $6,147,050 | $8,099,168 |
| Reinvestment of distributions | 11,425 | 200,582 | 496,287 | 10,552,616 |
| Shares redeemed | (515,795) | (634,705) | (23,017,589) | (31,737,294) |
| Net increase (decrease) | (370,257) | (280,716) | $(16,374,252) | $(13,085,510) |
| Class T | | | | |
| Shares sold | 23,059 | 21,812 | $1,036,279 | $1,102,045 |
| Reinvestment of distributions | 2,169 | 49,518 | 93,951 | 2,597,730 |
| Shares redeemed | (77,250) | (151,491) | (3,322,138) | (7,597,599) |
| Net increase (decrease) | (52,022) | (80,161) | $(2,191,908) | $(3,897,824) |
| Class B | | | | |
| Shares sold | 499 | 1,663 | $21,798 | $85,823 |
| Reinvestment of distributions | 68 | 12,380 | 2,895 | 641,184 |
| Shares redeemed | (61,115) | (59,611) | (2,725,253) | (2,906,257) |
| Net increase (decrease) | (60,548) | (45,568) | $(2,700,560) | $(2,179,250) |
| Class C | | | | |
| Shares sold | 41,578 | 42,631 | $1,834,681 | $2,146,853 |
| Reinvestment of distributions | 731 | 75,003 | 31,141 | 3,864,885 |
| Shares redeemed | (138,754) | (283,087) | (5,980,751) | (13,692,762) |
| Net increase (decrease) | (96,445) | (165,453) | $(4,114,929) | $(7,681,024) |
| Canada | | | | |
| Shares sold | 3,590,664 | 1,250,697 | $166,771,731 | $63,450,179 |
| Reinvestment of distributions | 388,588 | 4,716,591 | 16,926,879 | 249,177,482 |
| Shares redeemed | (6,566,019) | (11,643,757) | (289,731,847) | (581,614,067) |
| Net increase (decrease) | (2,586,767) | (5,676,469) | $(106,033,237) | $(268,986,406) |
| Class I | | | | |
| Shares sold | 807,708 | 66,679 | $37,813,282 | $3,430,310 |
| Reinvestment of distributions | 2,849 | 49,883 | 123,890 | 2,628,352 |
| Shares redeemed | (283,652) | (285,976) | (12,076,497) | (14,385,529) |
| Net increase (decrease) | 526,905 | (169,414) | $25,860,675 | $(8,326,867) |
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.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and Shareholders of Fidelity Canada Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Canada Fund (a fund of Fidelity Investment Trust) at October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Canada Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Class A | 1.40% | | | |
| Actual | | $1,000.00 | $1,007.30 | $7.06 |
| Hypothetical-C | | $1,000.00 | $1,018.10 | $7.10 |
| Class T | 1.69% | | | |
| Actual | | $1,000.00 | $1,006.10 | $8.52 |
| Hypothetical-C | | $1,000.00 | $1,016.64 | $8.57 |
| Class C | 2.13% | | | |
| Actual | | $1,000.00 | $1,003.60 | $10.73 |
| Hypothetical-C | | $1,000.00 | $1,014.43 | $10.79 |
| Canada | 1.09% | | | |
| Actual | | $1,000.00 | $1,009.00 | $5.50 |
| Hypothetical-C | | $1,000.00 | $1,019.66 | $5.53 |
| Class I | 1.12% | | | |
| Actual | | $1,000.00 | $1,009.20 | $5.66 |
| Hypothetical-C | | $1,000.00 | $1,019.51 | $5.69 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Canada Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity Canada Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.453 | $0.188 |
| Class T | 12/12/16 | 12/09/16 | $0.338 | $0.188 |
| Class C | 12/12/16 | 12/09/16 | $0.105 | $0.188 |
| Canada | 12/12/16 | 12/09/16 | $0.611 | $0.188 |
| Class I | 12/12/16 | 12/09/16 | $0.660 | $0.188 |
|
Class A designates 5%; Class T designates 7%; Class C designates 19%; Canada designates 4%; and Class I designates 4% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A, Class T, Class C, Canada, and Class I designate 100% of the dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity Canada Fund | | | |
| Class A | 12/07/15 | $0.5458 | $0.1278 |
| Class T | 12/07/15 | $0.4138 | $0.1278 |
| Class C | 12/07/15 | $0.1458 | $0.1278 |
| Canada | 12/07/15 | $0.7408 | $0.1278 |
| Class I | 12/07/15 | $0.7138 | $0.1278 |
|
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Canada Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there were portfolio management changes for the fund in January 2014 and September 2014.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one-, three-, and five-year periods, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.
Fidelity Canada Fund
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Fidelity Canada Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of the retail class ranked equal to the competitive median for 2015 and the total expense ratio of each of Class A, Class T, Class C, and Class I ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of each of Class A, Class T, Class C, and Class I of the fund was above the competitive median because of a positive performance fee adjustment in 2015. The Board noted that the total expense ratio of Class T was also above the competitive median because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although some classes were above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
ACAN-ANN-1216
1.843165.109
Fidelity Advisor® China Region Fund - Class A, Class T, Class C and Class I
Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® China Region Fund |
|
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (5.87)% | 5.84% | 6.69% |
| Class T (incl. 3.50% sales charge) | (3.99)% | 6.01% | 6.68% |
| Class C (incl. contingent deferred sales charge) | (1.75)% | 6.31% | 6.64% |
| Class I | 0.16% | 7.47% | 7.62% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on May 9, 2008. Returns prior to May 9, 2008, are those of Fidelity® China Region Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to May 9, 2008, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on May 9, 2008. Returns prior to May 9, 2008, are those of Fidelity® China Region Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to May 9, 2008, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on May 9, 2008. Returns prior to May 9, 2008, are those of Fidelity® China Region Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to May 9, 2008, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on May 9, 2008. Returns prior to May 9, 2008 are those of Fidelity® China Region Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® China Region Fund - Class A on October 31, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the MSCI Golden Dragon Index performed over the same period.
See above for additional information regarding the performance of Class A.
| Period Ending Values |
| $19,113 | Fidelity Advisor® China Region Fund - Class A |
| $18,685 | MSCI Golden Dragon Index |
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Robert Bao: For the year, the fund’s share classes generated flattish returns (excluding sales charges, if applicable), considerably lagging the 7.31% return of the benchmark MSCI Golden Dragon Index. Versus the benchmark, stock selection and sector selection both hurt, with most of the negative impact coming from the consumer discretionary, industrials and materials sectors. Geographically, picks in China detracted, as did overweighting China and underweighting Taiwan. The largest individual detractor was China Shanshui Cement Group, an out-of-benchmark stock that lost the vast majority of its value. Also weighing on relative results was Taiwan Semiconductor Manufacturing, which hurt because first we didn’t own it and later underweighted it for much of the period. Two non-benchmark positions – in Hong Kong-listed casino operator Summit Ascent Holdings and online travel company Tuniu, headquartered in China – further hampered results. Conversely, stock selection in consumer staples was a modest positive, along with positioning in utilities. A zero-weighting in the weak-performing shares of China-based online search firm Baidu made this benchmark stock our top relative contributor. Also bolstering results were non-benchmark names Kweichow Moutai, a liquor supplier based in China, and West China Cement. We liquidated the vast majority of this latter position to lock in profits after rival Anhui Conch Cement offered to double its stake in the company.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Cayman Islands | 30.6% |
| | China | 29.0% |
| | Taiwan | 20.3% |
| | United States of America* | 6.1% |
| | United Kingdom | 4.8% |
| | Bermuda | 3.0% |
| | Hong Kong | 2.7% |
| | Netherlands | 2.1% |
| | British Virgin Islands | 1.1% |
| | Other | 0.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | China | 37.1% |
| | Cayman Islands | 26.7% |
| | Taiwan | 18.9% |
| | Hong Kong | 6.2% |
| | United Kingdom | 3.5% |
| | Bermuda | 3.3% |
| | Netherlands | 2.8% |
| | British Virgin Islands | 1.1% |
| | United States of America* | 0.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 93.9 | 99.6 |
| Short-Term Investments and Net Other Assets (Liabilities) | 6.1 | 0.4 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Tencent Holdings Ltd. (Internet Software & Services) | 9.2 | 7.9 |
| Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors & Semiconductor Equipment) | 8.8 | 7.6 |
| Alibaba Group Holding Ltd. sponsored ADR (Internet Software & Services) | 5.8 | 2.7 |
| China Construction Bank Corp. (H Shares) (Banks) | 2.8 | 2.6 |
| Ping An Insurance (Group) Co. of China Ltd. (H Shares) (Insurance) | 2.5 | 2.7 |
| Hon Hai Precision Industry Co. Ltd. (Foxconn) (Electronic Equipment & Components) | 2.1 | 1.0 |
| Kweichow Moutai Co. Ltd. (A Shares) (Beverages) | 2.0 | 2.4 |
| Industrial & Commercial Bank of China Ltd. (H Shares) (Banks) | 1.9 | 2.3 |
| China Pacific Insurance (Group) Co. Ltd. (H Shares) (Insurance) | 1.7 | 2.0 |
| BBMG Corp. (H Shares) (Construction Materials) | 1.7 | 2.1 |
| | 38.5 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 36.2 | 27.8 |
| Financials | 17.0 | 22.1 |
| Consumer Discretionary | 12.6 | 19.8 |
| Industrials | 5.1 | 9.8 |
| Materials | 4.0 | 5.6 |
| Energy | 3.9 | 0.1 |
| Real Estate | 3.6 | 0.0 |
| Consumer Staples | 3.5 | 4.1 |
| Utilities | 3.3 | 2.9 |
| Health Care | 3.2 | 3.3 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Hong Kong, Taiwanese and Chinese markets. As of October 31, 2016, the Fund did not have more than 25% of its total assets invested in any one industry.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 93.2% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 11.9% | | | |
| Automobiles - 1.6% | | | |
| Chongqing Changan Automobile Co. Ltd. (B Shares) | | 9,000,741 | $13,752,575 |
| Guangzhou Automobile Group Co. Ltd. (H Shares) | | 2,324,000 | 2,810,777 |
| | | | 16,563,352 |
| Diversified Consumer Services - 1.8% | | | |
| New Oriental Education & Technology Group, Inc. sponsored ADR | | 297,200 | 14,898,636 |
| TAL Education Group ADR (a)(b) | | 51,000 | 4,153,440 |
| | | | 19,052,076 |
| Hotels, Restaurants & Leisure - 1.9% | | | |
| China CYTS Tours Holding Co. Ltd. | | 887,536 | 2,982,555 |
| China International Travel Service Corp. Ltd. (A Shares) | | 753,281 | 5,008,310 |
| Huangshan Tourism Development Co. Ltd. | | 7,381,914 | 10,105,840 |
| Shanghai Jin Jiang International Hotel Co. Ltd. (H Shares) | | 8,996,000 | 2,633,072 |
| | | | 20,729,777 |
| Household Durables - 3.2% | | | |
| Haier Electronics Group Co. Ltd. | | 675,000 | 1,089,671 |
| Nien Made Enterprise Co. Ltd. | | 800,000 | 9,286,836 |
| Qingdao Haier Co. Ltd. | | 3,099,822 | 4,565,693 |
| Sundart Holdings Ltd. | | 20,000,000 | 11,346,713 |
| Techtronic Industries Co. Ltd. | | 2,081,000 | 7,835,060 |
| | | | 34,123,973 |
| Internet & Direct Marketing Retail - 2.0% | | | |
| Ctrip.com International Ltd. ADR (a) | | 259,700 | 11,465,755 |
| JD.com, Inc. sponsored ADR (a) | | 390,500 | 10,133,475 |
| | | | 21,599,230 |
| Textiles, Apparel & Luxury Goods - 1.4% | | | |
| JNBY Design Ltd. | | 6,510,000 | 5,766,670 |
| Lao Feng Xiang Co. Ltd. (B Shares) | | 1,368,188 | 4,665,521 |
| Toung Loong Textile Manufacturing Co. Ltd. | | 1,618,300 | 4,439,886 |
| | | | 14,872,077 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 126,940,485 |
|
| CONSUMER STAPLES - 3.5% | | | |
| Beverages - 2.0% | | | |
| Kweichow Moutai Co. Ltd. (A Shares) | | 446,346 | 20,944,495 |
| Food Products - 1.5% | | | |
| China Modern Dairy Holdings Ltd. (a)(b) | | 34,000,000 | 7,408,888 |
| Unified-President Enterprises Corp. | | 4,611,000 | 8,935,791 |
| | | | 16,344,679 |
|
| TOTAL CONSUMER STAPLES | | | 37,289,174 |
|
| ENERGY - 3.9% | | | |
| Energy Equipment & Services - 0.8% | | | |
| China Oilfield Services Ltd. (H Shares) | | 8,126,000 | 7,858,243 |
| Oil, Gas & Consumable Fuels - 3.1% | | | |
| China Coal Energy Co. Ltd. (H Shares) (a) | | 11,180,000 | 6,342,813 |
| China Shenhua Energy Co. Ltd. (H Shares) | | 3,560,500 | 7,409,722 |
| CNOOC Ltd. | | 6,753,000 | 8,497,126 |
| PetroChina Co. Ltd. (H Shares) | | 16,080,000 | 11,002,503 |
| | | | 33,252,164 |
|
| TOTAL ENERGY | | | 41,110,407 |
|
| FINANCIALS - 17.0% | | | |
| Banks - 6.8% | | | |
| China Construction Bank Corp. (H Shares) | | 40,879,000 | 29,938,911 |
| Hangzhou Hikvision Digital Technology Co. Ltd. ELS (A Shares) (BNP Paribas Warrant Program) warrants 11/27/17 (a)(c) | | 3,196,700 | 11,577,529 |
| Industrial & Commercial Bank of China Ltd. (H Shares) | | 33,821,000 | 20,300,707 |
| Midea Group Co. Ltd. ELS (A Shares) (BNP Paribas Arbitrage Warrant Program) warrants 2/10/17 (a)(c) | | 2,559,400 | 10,255,278 |
| | | | 72,072,425 |
| Capital Markets - 6.0% | | | |
| Beijing Yanjing Brewery (UBS Warrant Programme) ELS warrants 10/6/17 (a)(c) | | 6,405,173 | 7,203,196 |
| CITIC Securities Co. Ltd. (H Shares) | | 1,156,000 | 2,563,738 |
| Hangzhou Robam Appliances Co. Ltd. ELS (A Shares) (UBS Warrant Programme) warrants 1/15/18 (a)(c) | | 1,330,500 | 7,430,284 |
| Jiangsu Yanghe Brewery Joint-Stock Co. Ltd. ELS (UBS Warrant Programme) warrants 10/23/17 (a)(c) | | 1,147,262 | 11,792,969 |
| Lens Technology Co., Ltd. ELS (UBS Warrant Programme) warrants 9/25/17 (a)(c) | | 2,192,811 | 8,226,520 |
| Tai Fook Securities Group Ltd. | | 16,516,000 | 10,605,267 |
| Wuliangye Yibin Co. Ltd. ELS (A Shares): | | | |
| (Deutsche Bank Warrant Program) warrants 3/20/17 (a)(c) | | 1,013,394 | 5,231,636 |
| (UBS Warrant Programme) warrants 3/7/19 (a)(c) | | 1,071,282 | 5,530,483 |
| Yunnan Baiyao Group Co. Ltd. ELS (A Shares) (UBS Warrant Programme) warrants 2/17/17 (a)(c) | | 559,455 | 5,716,088 |
| | | | 64,300,181 |
| Insurance - 4.2% | | | |
| China Pacific Insurance (Group) Co. Ltd. (H Shares) | | 5,143,600 | 18,603,191 |
| Ping An Insurance (Group) Co. of China Ltd. (H Shares) | | 4,994,500 | 26,371,408 |
| | | | 44,974,599 |
|
| TOTAL FINANCIALS | | | 181,347,205 |
|
| HEALTH CARE - 3.2% | | | |
| Biotechnology - 0.0% | | | |
| Samsung Biologics Co. Ltd. (a) | | 1,711 | 203,449 |
| Health Care Providers & Services - 1.1% | | | |
| Phoenix Healthcare Group Ltd. | | 6,945,000 | 11,050,319 |
| Life Sciences Tools & Services - 0.8% | | | |
| JHL Biotech, Inc. (a) | | 3,976,696 | 8,608,386 |
| Pharmaceuticals - 1.3% | | | |
| China Resources Pharmaceutical Group Ltd. | | 4,500,000 | 5,233,671 |
| Livzon Pharmaceutical Group, Inc. | | 1,492,800 | 8,709,788 |
| | | | 13,943,459 |
|
| TOTAL HEALTH CARE | | | 33,805,613 |
|
| INDUSTRIALS - 5.1% | | | |
| Air Freight & Logistics - 0.0% | | | |
| Sinotrans Air Transportation Development Co. Ltd. (A Shares) | | 30 | 85 |
| Construction & Engineering - 1.7% | | | |
| Beijing Urban Consolidated & Development Group Ltd. (H Shares) | | 20,963,000 | 14,487,906 |
| China Energy Engineering Corp. Ltd. | | 27,132,000 | 3,743,286 |
| | | | 18,231,192 |
| Electrical Equipment - 1.4% | | | |
| Harbin Electric Machinery Co. Ltd.(H Shares) | | 21,974,000 | 10,738,305 |
| Jiangnan Group Ltd. | | 25,552,000 | 4,217,181 |
| | | | 14,955,486 |
| Machinery - 0.2% | | | |
| EVA Precision Industrial Holdings Ltd. | | 15,240,000 | 1,670,288 |
| Road & Rail - 0.8% | | | |
| Daqin Railway Co. Ltd. (A Shares) | | 7,999,997 | 8,004,956 |
| Trading Companies & Distributors - 1.0% | | | |
| Summit Ascent Holdings Ltd. (a)(b) | | 35,866,000 | 10,960,205 |
|
| TOTAL INDUSTRIALS | | | 53,822,212 |
|
| INFORMATION TECHNOLOGY - 36.2% | | | |
| Electronic Equipment & Components - 5.1% | | | |
| Chroma ATE, Inc. | | 4,073,000 | 10,347,695 |
| Hon Hai Precision Industry Co. Ltd. (Foxconn) | | 8,366,400 | 22,635,201 |
| Largan Precision Co. Ltd. | | 85,000 | 10,069,461 |
| Sunny Optical Technology Group Co. Ltd. | | 1,076,000 | 5,258,222 |
| Tongda Group Holdings Ltd. | | 20,390,000 | 5,389,624 |
| | | | 53,700,203 |
| Internet Software & Services - 17.6% | | | |
| 58.com, Inc. ADR (a) | | 75,000 | 3,138,750 |
| Alibaba Group Holding Ltd. sponsored ADR (a) | | 606,200 | 61,644,478 |
| NetEase, Inc. ADR | | 68,300 | 17,552,417 |
| SINA Corp. (a) | | 99,700 | 7,192,358 |
| Tencent Holdings Ltd. | | 3,680,900 | 97,552,451 |
| Weibo Corp. sponsored ADR (a)(b) | | 9,970 | 458,720 |
| | | | 187,539,174 |
| Semiconductors & Semiconductor Equipment - 11.5% | | | |
| Advanced Semiconductor Engineering, Inc. | | 13,995,000 | 16,458,964 |
| Himax Technologies, Inc. sponsored ADR (b) | | 400,000 | 3,140,000 |
| Taiwan Semiconductor Manufacturing Co. Ltd. | | 15,496,000 | 93,082,563 |
| Vanguard International Semiconductor Corp. | | 4,668,000 | 9,534,840 |
| | | | 122,216,367 |
| Software - 0.9% | | | |
| China City Railway Transportation Technology Holdings Co. Ltd. (a) | | 48,540,000 | 10,013,990 |
| Technology Hardware, Storage & Peripherals - 1.1% | | | |
| ADLINK Technology, Inc. | | 3,682,844 | 7,148,772 |
| Axiomtek Co. Ltd. | | 2,000,000 | 3,552,342 |
| HTC Corp. (a) | | 358,000 | 1,049,184 |
| | | | 11,750,298 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 385,220,032 |
|
| MATERIALS - 4.0% | | | |
| Construction Materials - 2.9% | | | |
| BBMG Corp. (H Shares) | | 49,643,000 | 18,178,739 |
| China Shanshui Cement Group Ltd. (a)(b) | | 20,656,000 | 2,660,720 |
| TCC International Holdings Ltd. | | 28,948,000 | 7,353,129 |
| West China Cement Ltd. (a) | | 26,992,000 | 2,749,474 |
| | | | 30,942,062 |
| Metals & Mining - 1.1% | | | |
| Angang Steel Co. Ltd. (H Shares) (a) | | 10,712,000 | 5,497,194 |
| Jiangxi Copper Co. Ltd. (H Shares) | | 4,214,000 | 4,977,112 |
| Zijin Mining Group Co. Ltd. (H Shares) | | 3,106,000 | 977,189 |
| | | | 11,451,495 |
|
| TOTAL MATERIALS | | | 42,393,557 |
|
| REAL ESTATE - 3.6% | | | |
| Real Estate Management & Development - 3.6% | | | |
| Beijing Capital Land Ltd. (H Shares) | | 35,170,000 | 13,513,755 |
| Cheung Kong Property Holdings Ltd. | | 2,338,500 | 17,322,669 |
| Longfor Properties Co. Ltd. | | 789,500 | 1,048,520 |
| Sun Hung Kai Properties Ltd. | | 456,000 | 6,808,647 |
| | | | 38,693,591 |
| TELECOMMUNICATION SERVICES - 1.5% | | | |
| Diversified Telecommunication Services - 1.5% | | | |
| China Telecom Corp. Ltd. (H Shares) | | 7,408,000 | 3,830,300 |
| Chunghwa Telecom Co. Ltd. | | 3,109,000 | 10,655,518 |
| CITIC 1616 Holdings Ltd. | | 3,220,000 | 1,104,396 |
| | | | 15,590,214 |
| UTILITIES - 3.3% | | | |
| Independent Power and Renewable Electricity Producers - 2.4% | | | |
| Beijing Jingneng Clean Energy Co. Ltd. (H Shares) | | 22,166,000 | 6,745,074 |
| Canvest Environmental Protection Group Co. Ltd. | | 16,700,000 | 7,536,538 |
| Huaneng Renewables Corp. Ltd. (H Shares) | | 31,944,000 | 10,750,216 |
| | | | 25,031,828 |
| Water Utilities - 0.9% | | | |
| Beijing Enterprises Water Group Ltd. | | 13,838,000 | 10,045,444 |
|
| TOTAL UTILITIES | | | 35,077,272 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $899,926,189) | | | 991,289,762 |
|
| Convertible Preferred Stocks - 0.7% | | | |
| CONSUMER DISCRETIONARY - 0.7% | | | |
| Internet & Direct Marketing Retail - 0.7% | | | |
| China Internet Plus Holdings Ltd. Series A-11 (d) | | | |
| (Cost $6,268,244) | | 1,983,088 | 7,656,108 |
|
| Money Market Funds - 3.4% | | | |
| Fidelity Cash Central Fund, 0.41% (e) | | 24,629,687 | 24,637,076 |
| Fidelity Securities Lending Cash Central Fund 0.48% (e)(f) | | 11,655,545 | 11,657,876 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $36,292,626) | | | 36,294,952 |
| TOTAL INVESTMENT PORTFOLIO - 97.3% | | | |
| (Cost $942,487,059) | | | 1,035,240,822 |
| NET OTHER ASSETS (LIABILITIES) - 2.7% | | | 28,877,647 |
| NET ASSETS - 100% | | | $1,064,118,469 |
Security Type Abbreviations
ELS – Equity-Linked Security
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $72,963,983 or 6.9% of net assets.
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $7,656,108 or 0.7% of net assets.
(e) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(f) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| China Internet Plus Holdings Ltd. Series A-11 | 1/26/15 | $6,268,244 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $73,885 |
| Fidelity Securities Lending Cash Central Fund | 1,295,017 |
| Total | $1,368,902 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $134,596,593 | $126,940,485 | $-- | $7,656,108 |
| Consumer Staples | 37,289,174 | 37,289,174 | -- | -- |
| Energy | 41,110,407 | 21,610,778 | 19,499,629 | -- |
| Financials | 181,347,205 | 88,082,515 | 87,548,602 | 5,716,088 |
| Health Care | 33,805,613 | 33,602,164 | 203,449 | -- |
| Industrials | 53,822,212 | 53,822,212 | -- | -- |
| Information Technology | 385,220,032 | 178,126,054 | 207,093,978 | -- |
| Materials | 42,393,557 | 39,732,837 | -- | 2,660,720 |
| Real Estate | 38,693,591 | 38,693,591 | -- | -- |
| Telecommunication Services | 15,590,214 | 4,934,696 | 10,655,518 | -- |
| Utilities | 35,077,272 | 35,077,272 | -- | -- |
| Money Market Funds | 36,294,952 | 36,294,952 | -- | -- |
| Total Investments in Securities: | $1,035,240,822 | $694,206,730 | $325,001,176 | $16,032,916 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $440,166,850 |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:
| Investments in Securities: | |
| Equities - Consumer Discretionary | |
| Beginning Balance | $12,373,756 |
| Net Realized Gain (Loss) on Investment Securities | -- |
| Net Unrealized Gain (Loss) on Investment Securities | 1,388 |
| Cost of Purchases | -- |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | (4,719,036) |
| Ending Balance | $7,656,108 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $1,388 |
| Equities - Health Care | |
| Beginning Balance | $14,369,442 |
| Net Realized Gain (Loss) on Investment Securities | (2,338,033) |
| Net Unrealized Gain (Loss) on Investment Securities | 2,825,119 |
| Cost of Purchases | -- |
| Proceeds of Sales | (6,769,445) |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | (8,087,083) |
| Ending Balance | $-- |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $-- |
| Equities - Industrials | |
| Beginning Balance | $15,897,809 |
| Net Realized Gain (Loss) on Investment Securities | 3,170,175 |
| Net Unrealized Gain (Loss) on Investment Securities | (6,277,111) |
| Cost of Purchases | 3,344,006 |
| Proceeds of Sales | (16,134,879) |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $-- |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $-- |
| Equities - Materials | |
| Beginning Balance | $14,440,021 |
| Net Realized Gain (Loss) on Investment Securities | -- |
| Net Unrealized Gain (Loss) on Investment Securities | (11,779,301) |
| Cost of Purchases | -- |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $2,660,720 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $(11,779,301) |
| Other Investments in Securities | |
| Beginning Balance | $-- |
| Net Realized Gain (Loss) on Investment Securities | 45,691 |
| Net Unrealized Gain (Loss) on Investment Securities | (670,536) |
| Cost of Purchases | 6,340,933 |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $5,716,088 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $(670,536) |
The information used in the above reconciliations represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliations are included in Net Gain (Loss) on the Fund's Statement of Operations.
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $10,804,361) — See accompanying schedule:
Unaffiliated issuers (cost $906,194,433) | $998,945,870 | |
| Fidelity Central Funds (cost $36,292,626) | 36,294,952 | |
| Total Investments (cost $942,487,059) | | $1,035,240,822 |
| Foreign currency held at value (cost $148,734) | | 149,002 |
| Receivable for investments sold | | 43,143,103 |
| Receivable for fund shares sold | | 573,167 |
| Dividends receivable | | 78,210 |
| Distributions receivable from Fidelity Central Funds | | 72,094 |
| Prepaid expenses | | 2,750 |
| Other receivables | | 26,218 |
| Total assets | | 1,079,285,366 |
| Liabilities | | |
| Payable for investments purchased | $1,081,005 | |
| Payable for fund shares redeemed | 1,391,162 | |
| Accrued management fee | 636,535 | |
| Distribution and service plan fees payable | 16,956 | |
| Other affiliated payables | 234,584 | |
| Other payables and accrued expenses | 151,435 | |
| Collateral on securities loaned, at value | 11,655,220 | |
| Total liabilities | | 15,166,897 |
| Net Assets | | $1,064,118,469 |
| Net Assets consist of: | | |
| Paid in capital | | $1,178,148,346 |
| Undistributed net investment income | | 10,634,162 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (217,422,863) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 92,758,824 |
| Net Assets | | $1,064,118,469 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($22,937,001 ÷ 901,030 shares) | | $25.46 |
| Maximum offering price per share (100/94.25 of $25.46) | | $27.01 |
| Class T: | | |
| Net Asset Value and redemption price per share ($5,644,336 ÷ 222,703 shares) | | $25.34 |
| Maximum offering price per share (100/96.50 of $25.34) | | $26.26 |
| Class C: | | |
| Net Asset Value and offering price per share ($11,218,488 ÷ 451,957 shares)(a) | | $24.82 |
| China Region: | | |
| Net Asset Value, offering price and redemption price per share ($1,004,984,818 ÷ 38,985,951 shares) | | $25.78 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($19,333,826 ÷ 754,563 shares) | | $25.62 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $23,845,641 |
| Income from Fidelity Central Funds (including $1,295,017 from security lending) | | 1,368,902 |
| Income before foreign taxes withheld | | 25,214,543 |
| Less foreign taxes withheld | | (2,524,867) |
| Total income | | 22,689,676 |
| Expenses | | |
| Management fee | $7,676,892 | |
| Transfer agent fees | 2,422,825 | |
| Distribution and service plan fees | 210,154 | |
| Accounting and security lending fees | 518,036 | |
| Custodian fees and expenses | 379,053 | |
| Independent trustees' fees and expenses | 4,852 | |
| Registration fees | 93,824 | |
| Audit | 101,787 | |
| Legal | 3,898 | |
| Interest | 2,278 | |
| Miscellaneous | 10,939 | |
| Total expenses before reductions | 11,424,538 | |
| Expense reductions | (93,623) | 11,330,915 |
| Net investment income (loss) | | 11,358,761 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (213,648,715) | |
| Fidelity Central Funds | 9,478 | |
| Foreign currency transactions | 192,332 | |
| Total net realized gain (loss) | | (213,446,905) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 180,727,946 | |
| Assets and liabilities in foreign currencies | 5,159 | |
| Total change in net unrealized appreciation (depreciation) | | 180,733,105 |
| Net gain (loss) | | (32,713,800) |
| Net increase (decrease) in net assets resulting from operations | | $(21,355,039) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $11,358,761 | $23,670,929 |
| Net realized gain (loss) | (213,446,905) | 235,474,014 |
| Change in net unrealized appreciation (depreciation) | 180,733,105 | (344,541,210) |
| Net increase (decrease) in net assets resulting from operations | (21,355,039) | (85,396,267) |
| Distributions to shareholders from net investment income | (15,103,497) | (13,114,934) |
| Distributions to shareholders from net realized gain | (159,831,115) | (172,413,722) |
| Total distributions | (174,934,612) | (185,528,656) |
| Share transactions - net increase (decrease) | (83,319,865) | 200,238,928 |
| Redemption fees | 164,633 | 2,391,591 |
| Total increase (decrease) in net assets | (279,444,883) | (68,294,404) |
| Net Assets | | |
| Beginning of period | 1,343,563,352 | 1,411,857,756 |
| End of period | $1,064,118,469 | $1,343,563,352 |
| Other Information | | |
| Undistributed net investment income end of period | $10,634,162 | $15,009,760 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.34 | $34.18 | $35.56 | $28.53 | $27.28 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .18 | .40B | .21 | .30 | .36 |
| Net realized and unrealized gain (loss) | (.20) | (.83) | 2.01C | 7.06 | 1.42 |
| Total from investment operations | (.02) | (.43) | 2.22 | 7.36 | 1.78 |
| Distributions from net investment income | (.27) | (.22) | (.30) | (.34) | (.19) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.86) | (4.46) | (3.61) | (.34) | (.53) |
| Redemption fees added to paid in capitalA | –D | .05 | .01 | .01 | –D |
| Net asset value, end of period | $25.46 | $29.34 | $34.18 | $35.56 | $28.53 |
| Total ReturnE,F | (.13)% | (1.45)% | 6.45%C | 26.07% | 6.70% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.33% | 1.28% | 1.35% | 1.35% | 1.36% |
| Expenses net of fee waivers, if any | 1.33% | 1.28% | 1.35% | 1.35% | 1.36% |
| Expenses net of all reductions | 1.32% | 1.26% | 1.35% | 1.31% | 1.29% |
| Net investment income (loss) | .75% | 1.26%B | .64% | .94% | 1.35% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $22,937 | $32,761 | $21,728 | $20,623 | $13,539 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .85%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.42%.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.18 | $34.02 | $35.40 | $28.40 | $27.13 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .10 | .30B | .12 | .21 | .29 |
| Net realized and unrealized gain (loss) | (.22) | (.83) | 1.99C | 7.04 | 1.40 |
| Total from investment operations | (.12) | (.53) | 2.11 | 7.25 | 1.69 |
| Distributions from net investment income | (.13) | (.12) | (.19) | (.26) | (.08) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.72) | (4.36) | (3.50) | (.26) | (.42) |
| Redemption fees added to paid in capitalA | –D | .05 | .01 | .01 | –D |
| Net asset value, end of period | $25.34 | $29.18 | $34.02 | $35.40 | $28.40 |
| Total ReturnE,F | (.50)% | (1.79)% | 6.15%C | 25.74% | 6.38% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.67% | 1.62% | 1.65% | 1.64% | 1.64% |
| Expenses net of fee waivers, if any | 1.67% | 1.62% | 1.65% | 1.64% | 1.64% |
| Expenses net of all reductions | 1.67% | 1.60% | 1.65% | 1.60% | 1.57% |
| Net investment income (loss) | .40% | .92%B | .35% | .65% | 1.06% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $5,644 | $6,409 | $6,305 | $5,965 | $4,349 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .51%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.12%.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $28.68 | $33.56 | $34.99 | $28.07 | $26.86 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | –B | .15C | (.02) | .06 | .16 |
| Net realized and unrealized gain (loss) | (.21) | (.80) | 1.97D | 6.97 | 1.39 |
| Total from investment operations | (.21) | (.65) | 1.95 | 7.03 | 1.55 |
| Distributions from net investment income | (.06) | (.04) | (.08) | (.12) | – |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.65) | (4.28) | (3.39) | (.12) | (.34) |
| Redemption fees added to paid in capitalA | –B | .05 | .01 | .01 | –B |
| Net asset value, end of period | $24.82 | $28.68 | $33.56 | $34.99 | $28.07 |
| Total ReturnE,F | (.88)% | (2.21)% | 5.71%D | 25.14% | 5.88% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 2.07% | 2.05% | 2.07% | 2.10% | 2.11% |
| Expenses net of fee waivers, if any | 2.07% | 2.05% | 2.07% | 2.10% | 2.11% |
| Expenses net of all reductions | 2.06% | 2.02% | 2.07% | 2.07% | 2.04% |
| Net investment income (loss) | .01% | .49%C | (.07)% | .19% | .59% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $11,218 | $14,355 | $10,445 | $6,957 | $4,515 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .09%.
D Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 5.68%.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.66 | $34.51 | $35.83 | $28.73 | $27.49 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .26 | .51B | .33 | .41 | .45 |
| Net realized and unrealized gain (loss) | (.21) | (.84) | 2.03C | 7.11 | 1.42 |
| Total from investment operations | .05 | (.33) | 2.36 | 7.52 | 1.87 |
| Distributions from net investment income | (.35) | (.33) | (.38) | (.43) | (.29) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.93)D | (4.57) | (3.69) | (.43) | (.63) |
| Redemption fees added to paid in capitalA | –E | .05 | .01 | .01 | –E |
| Net asset value, end of period | $25.78 | $29.66 | $34.51 | $35.83 | $28.73 |
| Total ReturnF | .15% | (1.14)% | 6.83%C | 26.51% | 7.01% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.02% | .99% | 1.01% | 1.02% | 1.04% |
| Expenses net of fee waivers, if any | 1.02% | .98% | 1.01% | 1.02% | 1.04% |
| Expenses net of all reductions | 1.01% | .96% | 1.01% | .98% | .98% |
| Net investment income (loss) | 1.06% | 1.55%B | .99% | 1.27% | 1.66% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,004,985 | $1,262,274 | $1,352,761 | $1,425,828 | $1,265,488 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.15%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.80%.
D Total distributions of $3.93 per share is comprised of distributions from net investment income of $.345 and distributions from net realized gain of $3.588 per share.
E Amount represents less than $.005 per share.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.51 | $34.39 | $35.75 | $28.68 | $27.46 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .26 | .51B | .34 | .42 | .45 |
| Net realized and unrealized gain (loss) | (.20) | (.84) | 2.02C | 7.10 | 1.42 |
| Total from investment operations | .06 | (.33) | 2.36 | 7.52 | 1.87 |
| Distributions from net investment income | (.36) | (.36) | (.43) | (.46) | (.31) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.95) | (4.60) | (3.73)D | (.46) | (.65) |
| Redemption fees added to paid in capitalA | –E | .05 | .01 | .01 | –E |
| Net asset value, end of period | $25.62 | $29.51 | $34.39 | $35.75 | $28.68 |
| Total ReturnF | .16% | (1.14)% | 6.87%C | 26.58% | 7.02% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.00% | .97% | .98% | .97% | 1.04% |
| Expenses net of fee waivers, if any | 1.00% | .97% | .98% | .97% | 1.04% |
| Expenses net of all reductions | .99% | .95% | .98% | .93% | .98% |
| Net investment income (loss) | 1.07% | 1.57%B | 1.01% | 1.32% | 1.66% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $19,334 | $26,961 | $19,404 | $10,206 | $1,958 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.16%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.84%.
D Total distributions of $3.73 per share is comprised of distributions from net investment income of $.425 and distributions from net realized gain of $3.306 per share.
E Amount represents less than $.005 per share.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity China Region Fund (the Fund) is a fund of Fidelity Investment 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, China Region and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy. Equity securities, including restricted securities, for which observable inputs are not available are valued using alternate valuation approaches, including the market approach and the income approach and are categorized as Level 3 in the hierarchy. The market approach generally consists of using comparable market transactions while the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
The following provides information on Level 3 securities held by the Fund that were valued at period end based on unobservable inputs. These amounts exclude valuations provided by a broker.
| Asset Type | Fair Value at 10/31/16 | Valuation Technique (s) | Unobservable Input | Amount or Range / Weighted Average | Impact to Valuation from an Increase in Input(a) |
| Equities | $16,032,916 | Book value | Book value multiple | 1.0 | Increase |
| | | Market approach | Transaction price | $3.86 | Increase |
| | | | Discount rate | 10.0% | Decrease |
| | | | Last trade | $69.23 | Increase |
(a) Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, as well as a roll forward of Level 3 investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), 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 | $147,085,482 |
| Gross unrealized depreciation | (60,210,376) |
| Net unrealized appreciation (depreciation) on securities | $86,875,106 |
| Tax Cost | $948,365,716 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $12,545,547 |
| Capital loss carryforward | $(213,455,585) |
| Net unrealized appreciation (depreciation) on securities and other investments | $86,880,167 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(180,168,755) |
| Long-term | (33,286,830) |
| Total capital loss carryforward | $(213,455,585) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $15,103,497 | $ 14,374,708 |
| Long-term Capital Gains | 159,831,115 | 171,153,948 |
| Total | $174,934,612 | $ 185,528,656 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $759,144,025 and $1,054,572,219, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| | Distribution
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $61,169 | $2,147 |
| Class T | .25% | .25% | 27,456 | 251 |
| Class B | .75% | .25% | 3,869 | 2,902 |
| Class C | .75% | .25% | 117,660 | 37,575 |
| | | | $210,154 | $42,875 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $42,111 |
| Class T | 2,909 |
| Class B(a) | 282 |
| Class C(a) | 7,725 |
| | $53,027 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $67,457 | .28 |
| Class T | 20,574 | .37 |
| Class B | 1,105 | .29 |
| Class C | 31,284 | .27 |
| China Region | 2,264,470 | .22 |
| Class I | 37,935 | .20 |
| | $2,422,825 | |
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 $3,430 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $5,885,000 | .59% | $2,033 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,779 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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, and includes $12,193 from securities loaned to FCM.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $2,532,250. The weighted average interest rate was .87%. The interest expense amounted to $245 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $84,489 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $9,134.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $297,014 | $147,088 |
| Class T | 28,522 | 22,529 |
| Class C | 29,301 | 12,652 |
| China Region | 14,431,516 | 12,728,622 |
| Class I | 317,144 | 204,043 |
| Total | $15,103,497 | $13,114,934 |
| From net realized gain | | |
| Class A | $3,946,989 | $2,783,517 |
| Class T | 763,704 | 789,251 |
| Class B | 93,006 | 149,794 |
| Class C | 1,752,229 | 1,276,956 |
| China Region | 150,087,760 | 165,004,911 |
| Class I | 3,187,427 | 2,409,293 |
| Total | $159,831,115 | $172,413,722 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 240,368 | 1,058,546 | $5,824,186 | $35,978,665 |
| Reinvestment of distributions | 162,605 | 93,297 | 4,157,811 | 2,812,898 |
| Shares redeemed | (618,365) | (671,056) | (14,282,494) | (22,101,227) |
| Net increase (decrease) | (215,392) | 480,787 | $(4,300,497) | $16,690,336 |
| Class T | | | | |
| Shares sold | 43,307 | 151,664 | $1,037,492 | $5,390,399 |
| Reinvestment of distributions | 30,599 | 26,640 | 781,504 | 801,072 |
| Shares redeemed | (70,825) | (143,989) | (1,686,295) | (4,554,275) |
| Net increase (decrease) | 3,081 | 34,315 | $132,701 | $1,637,196 |
| Class B | | | | |
| Shares sold | 30 | 2,771 | $648 | $95,500 |
| Reinvestment of distributions | 3,443 | 4,834 | 87,630 | 144,877 |
| Shares redeemed | (31,204) | (15,827) | (704,876) | (523,534) |
| Net increase (decrease) | (27,731) | (8,222) | $(616,598) | $(283,157) |
| Class C | | | | |
| Shares sold | 98,283 | 412,366 | $2,387,271 | $14,420,908 |
| Reinvestment of distributions | 55,713 | 38,139 | 1,398,404 | 1,131,586 |
| Shares redeemed | (202,505) | (261,252) | (4,847,372) | (7,778,046) |
| Net increase (decrease) | (48,509) | 189,253 | $(1,061,697) | $7,774,448 |
| China Region | | | | |
| Shares sold | 3,781,033 | 18,091,274 | $92,584,217 | $635,141,274 |
| Reinvestment of distributions | 6,142,435 | 5,608,420 | 158,659,097 | 170,439,887 |
| Shares redeemed | (13,494,506) | (20,336,385) | (325,219,240) | (642,334,138) |
| Net increase (decrease) | (3,571,038) | 3,363,309 | $(73,975,926) | $163,247,023 |
| Class I | | | | |
| Shares sold | 405,852 | 1,017,162 | $10,200,502 | $33,130,120 |
| Reinvestment of distributions | 99,936 | 58,945 | 2,565,348 | 1,781,897 |
| Shares redeemed | (664,751) | (726,796) | (16,263,698) | (23,738,935) |
| Net increase (decrease) | (158,963) | 349,311 | $(3,497,848) | $11,173,082 |
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and Shareholders of Fidelity China Region Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity China Region Fund (a fund of Fidelity Investment Trust) at October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity China Region Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Class A | 1.32% | | | |
| Actual | | $1,000.00 | $1,116.70 | $7.02 |
| Hypothetical-C | | $1,000.00 | $1,018.50 | $6.70 |
| Class T | 1.67% | | | |
| Actual | | $1,000.00 | $1,114.80 | $8.88 |
| Hypothetical-C | | $1,000.00 | $1,016.74 | $8.47 |
| Class C | 2.05% | | | |
| Actual | | $1,000.00 | $1,112.50 | $10.89 |
| Hypothetical-C | | $1,000.00 | $1,014.83 | $10.38 |
| China Region | 1.01% | | | |
| Actual | | $1,000.00 | $1,118.40 | $5.38 |
| Hypothetical-C | | $1,000.00 | $1,020.06 | $5.13 |
| Class I | .99% | | | |
| Actual | | $1,000.00 | $1,118.30 | $5.27 |
| Hypothetical-C | | $1,000.00 | $1,020.16 | $5.03 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity China Region Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity China Region Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.182 | $0.050 |
| Class T | 12/12/16 | 12/09/16 | $0.111 | $0.050 |
| Class C | 12/12/16 | 12/09/16 | $0.000 | $0.018 |
| China Region | 12/12/16 | 12/09/16 | $0.271 | $0.050 |
| Class I | 12/12/16 | 12/09/16 | $0.281 | $0.050 |
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Class A, Class T, Class C, and China Region designates 100%; Class I designates 99%; of dividend distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity China Region Fund | | | |
| Class A | 12/07/15 | $0.3321 | $0.0621 |
| Class T | 12/07/15 | $0.1961 | $0.0621 |
| Class C | 12/07/15 | $0.1221 | $0.0621 |
| China Region | 12/07/15 | $0.4071 | $0.0621 |
| Class I | 12/07/15 | $0.4191 | $0.0621 |
|
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity China Region Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one-, three-, and five-year periods, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.
Fidelity China Region Fund
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and considered by the Board.
Fidelity China Region Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each class ranked below the competitive median for 2015.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
AHKC-ANN-1216
1.861459.108
Fidelity Advisor® Europe Fund - Class A, Class T, Class C and Class I
Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® Europe Fund |
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Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (12.06)% | 5.07% | 1.15% |
| Class T (incl. 3.50% sales charge) | (10.24)% | 5.41% | 1.31% |
| Class C (incl. contingent deferred sales charge) | (8.34)% | 5.89% | 1.54% |
| Class I | (6.33)% | 6.53% | 1.85% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on March 18, 2014. Returns prior to March 18, 2014, are those of Fidelity® Europe Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to March 18, 2014, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on March 18, 2014. Returns prior to March 18, 2014, are those of Fidelity® Europe Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to March 18, 2014, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on March 18, 2014. Returns prior to March 18, 2014, are those of Fidelity® Europe Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to March 18, 2014, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on March 18, 2014. Returns prior to March 18, 2014 are those of Fidelity® Europe Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Europe Fund - Class A on October 31, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the MSCI Europe Index performed over the same period.
See above for additional information regarding the performance of Class A.
| Period Ending Values |
| $11,216 | Fidelity Advisor® Europe Fund - Class A |
| $11,034 | MSCI Europe Index |
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Stefan Lindblad: For the one-year period ending October 31, 2016, the fund’s share classes (excluding sales charges, if applicable) posted negative results but, in general, modestly outpaced the -7.23% result of the fund’s benchmark MSCI Europe Index. Volatility was a consistent factor, stoked by the bottoming-out of commodities and its subsequent rebound, as well as by Brexit. Relative to the MSCI index, stock selection drove results, most notably in the consumer discretionary sector. Specifically, shares of German sports-apparel company adidas provided the biggest relative boost. The stock rose solidly throughout the period, and I sold our position to take profits after it reached my price target. Elsewhere, our position in Norwegian oil and gas company Statoil proved beneficial. I bought shares of Statoil when oil prices dropped to the low $30 range earlier in this reporting period. Once oil began to rally, I sold the position at a profit. Conversely, a combination of stock selection and an underweighting in the strong-performing materials sector held our relative performance back. Underweighting consumer staples also detracted. The fund’s most significant individual detractor, though, came from health care: Swedish medical tech company Getinge’s business restructuring has taken longer than expected, and the stock suffered.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | United Kingdom | 20.5% |
| | Sweden | 15.4% |
| | Germany | 14.2% |
| | France | 8.7% |
| | Netherlands | 8.3% |
| | Switzerland | 8.2% |
| | Bailiwick of Jersey | 4.6% |
| | Bermuda | 3.5% |
| | Ireland | 3.3% |
| | Other* | 13.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | United Kingdom | 25.5% |
| | Sweden | 15.9% |
| | Germany | 14.5% |
| | France | 9.1% |
| | Denmark | 6.2% |
| | Bailiwick of Jersey | 5.5% |
| | Isle of Man | 3.8% |
| | Spain | 3.2% |
| | Ireland | 3.0% |
| | Other* | 13.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.6 | 98.3 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.4 | 1.7 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| SAP AG (Germany, Software) | 4.7 | 3.5 |
| Nestle SA (Reg. S) (Switzerland, Food Products) | 4.7 | 0.0 |
| Koninklijke Philips Electronics NV (Netherlands, Industrial Conglomerates) | 3.8 | 0.0 |
| Shire PLC (Bailiwick of Jersey, Biotechnology) | 3.3 | 3.2 |
| Getinge AB (B Shares) (Sweden, Health Care Equipment & Supplies) | 3.1 | 3.5 |
| Vostok New Ventures Ltd. SDR (Bermuda, Capital Markets) | 2.7 | 1.6 |
| Standard Chartered PLC (United Kingdom) (United Kingdom, Banks) | 2.7 | 3.0 |
| William Hill PLC (United Kingdom, Hotels, Restaurants & Leisure) | 2.6 | 3.1 |
| Investor AB (B Shares) (Sweden, Diversified Financial Services) | 2.3 | 0.0 |
| Svenska Cellulosa AB (SCA) (B Shares) (Sweden, Household Products) | 2.2 | 1.9 |
| | 32.1 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Industrials | 22.2 | 17.7 |
| Financials | 21.1 | 24.6 |
| Information Technology | 16.3 | 13.4 |
| Consumer Discretionary | 12.7 | 16.7 |
| Health Care | 12.4 | 17.3 |
| Consumer Staples | 7.8 | 3.8 |
| Materials | 2.4 | 1.9 |
| Real Estate | 2.0 | 0.0 |
| Energy | 1.5 | 1.6 |
| Utilities | 1.2 | 1.3 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 99.6% | | | |
| | | Shares | Value |
| Bailiwick of Jersey - 4.6% | | | |
| Shire PLC | | 652,600 | $36,847,557 |
| Wolseley PLC | | 265,134 | 13,795,516 |
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| TOTAL BAILIWICK OF JERSEY | | | 50,643,073 |
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| Bermuda - 3.5% | | | |
| Vostok Emerging Finance Ltd. (depository receipt) (a)(b)(c) | | 53,380,307 | 8,746,849 |
| Vostok New Ventures Ltd. SDR (a) | | 3,952,236 | 29,645,653 |
|
| TOTAL BERMUDA | | | 38,392,502 |
|
| Denmark - 2.5% | | | |
| Nets A/S (d) | | 947,200 | 18,089,035 |
| Scandinavian Tobacco Group A/S | | 555,357 | 9,614,123 |
|
| TOTAL DENMARK | | | 27,703,158 |
|
| Finland - 1.4% | | | |
| Valmet Corp. | | 1,047,200 | 15,553,598 |
| France - 8.7% | | | |
| Bollore Group | | 3,447,549 | 11,353,641 |
| Capgemini SA | | 225,100 | 18,651,374 |
| Havas SA | | 2,857,100 | 23,243,724 |
| Publicis Groupe SA | | 144,746 | 9,930,933 |
| Rubis | | 148,500 | 13,543,359 |
| Wendel SA | | 167,500 | 19,269,904 |
|
| TOTAL FRANCE | | | 95,992,935 |
|
| Germany - 14.2% | | | |
| Bertrandt AG | | 44,200 | 4,708,919 |
| Brenntag AG | | 392,300 | 20,970,372 |
| CompuGroup Medical AG | | 259,600 | 11,493,078 |
| CTS Eventim AG | | 365,769 | 13,141,845 |
| EDAG Engineering Group AG (b) | | 199,079 | 3,278,085 |
| Fresenius Medical Care AG & Co. KGaA | | 139,900 | 11,395,434 |
| Fresenius SE & Co. KGaA | | 206,797 | 15,264,247 |
| GEA Group AG | | 386,506 | 14,945,508 |
| LEG Immobilien AG | | 124,390 | 10,492,435 |
| SAP AG | | 587,805 | 51,785,284 |
|
| TOTAL GERMANY | | | 157,475,207 |
|
| Ireland - 3.3% | | | |
| DCC PLC (United Kingdom) | | 149,700 | 12,212,466 |
| Ryanair Holdings PLC sponsored ADR | | 152,067 | 11,418,711 |
| United Drug PLC (United Kingdom) | | 1,554,241 | 12,432,125 |
|
| TOTAL IRELAND | | | 36,063,302 |
|
| Isle of Man - 3.1% | | | |
| Paysafe Group PLC (a) | | 4,237,010 | 22,455,814 |
| Playtech Ltd. | | 1,030,319 | 11,703,105 |
|
| TOTAL ISLE OF MAN | | | 34,158,919 |
|
| Italy - 1.1% | | | |
| Prada SpA | | 3,449,900 | 12,099,371 |
| Malta - 1.0% | | | |
| Kambi Group PLC (a)(b) | | 752,299 | 11,181,849 |
| Netherlands - 8.3% | | | |
| CSM NV (exchangeable) | | 634,600 | 14,643,208 |
| Intertrust NV | | 551,725 | 11,640,711 |
| Koninklijke Philips Electronics NV | | 1,401,300 | 42,224,201 |
| Koninklijke Wessanen NV | | 858,800 | 10,261,809 |
| Wolters Kluwer NV | | 345,200 | 13,359,646 |
|
| TOTAL NETHERLANDS | | | 92,129,575 |
|
| Norway - 2.3% | | | |
| Schibsted ASA (A Shares) | | 396,600 | 9,508,973 |
| TGS Nopec Geophysical Co. ASA (b) | | 812,300 | 16,467,500 |
|
| TOTAL NORWAY | | | 25,976,473 |
|
| Spain - 1.5% | | | |
| Amadeus IT Holding SA Class A | | 342,900 | 16,185,995 |
| Sweden - 15.4% | | | |
| AF AB (B Shares) | | 132,500 | 2,427,855 |
| Dometic Group AB | | 1,899,000 | 13,434,908 |
| Getinge AB (B Shares) | | 2,070,400 | 33,925,389 |
| Hemfosa Fastigheter AB | | 1,295,260 | 12,189,468 |
| Indutrade AB | | 903,300 | 16,791,580 |
| Investor AB (B Shares) | | 703,868 | 25,023,058 |
| Lundbergfoeretagen AB | | 94,092 | 6,094,210 |
| Nobia AB | | 634,800 | 5,531,215 |
| Nordea Bank AB | | 972,800 | 10,226,509 |
| Pandox AB (b) | | 708,200 | 11,228,139 |
| Svenska Cellulosa AB (SCA) (B Shares) | | 869,900 | 24,646,115 |
| Svenska Handelsbanken AB (A Shares) | | 652,600 | 8,896,977 |
|
| TOTAL SWEDEN | | | 170,415,423 |
|
| Switzerland - 8.2% | | | |
| ABB Ltd. (Reg.) | | 929,180 | 19,169,382 |
| Nestle SA (Reg. S) | | 713,854 | 51,764,346 |
| Panalpina Welttransport Holding AG | | 151,620 | 19,688,919 |
|
| TOTAL SWITZERLAND | | | 90,622,647 |
|
| United Kingdom - 20.5% | | | |
| Bunzl PLC | | 460,058 | 12,382,811 |
| CMC Markets PLC | | 3,189,300 | 7,409,229 |
| Dechra Pharmaceuticals PLC | | 982,700 | 16,177,994 |
| Diploma PLC | | 1,298,700 | 14,902,583 |
| Essentra PLC | | 1,990,100 | 12,423,000 |
| International Personal Finance PLC | | 4,993,203 | 17,998,899 |
| Micro Focus International PLC | | 611,300 | 16,019,630 |
| NCC Group Ltd. | | 5,707,500 | 13,238,432 |
| Prudential PLC | | 1,465,649 | 23,917,724 |
| Saga PLC | | 3,108,100 | 7,547,760 |
| Shawbrook Group PLC (a) | | 2,688,800 | 7,398,373 |
| Softcat PLC | | 3,064,278 | 12,152,191 |
| St. James's Place Capital PLC | | 553,762 | 6,405,254 |
| Standard Chartered PLC (United Kingdom) | | 3,361,700 | 29,292,698 |
| William Hill PLC | | 8,013,573 | 29,013,878 |
|
| TOTAL UNITED KINGDOM | | | 226,280,456 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $1,128,734,265) | | | 1,100,874,483 |
|
| Money Market Funds - 0.6% | | | |
| Fidelity Cash Central Fund, 0.41% (e) | | 166,227 | 166,277 |
| Fidelity Securities Lending Cash Central Fund 0.48% (e)(f) | | 6,435,642 | 6,436,929 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $6,602,742) | | | 6,603,206 |
| TOTAL INVESTMENT PORTFOLIO - 100.2% | | | |
| (Cost $1,135,337,007) | | | 1,107,477,689 |
| NET OTHER ASSETS (LIABILITIES) - (0.2)% | | | (2,396,126) |
| NET ASSETS - 100% | | | $1,105,081,563 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated company
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $18,089,035 or 1.6% of net assets.
(e) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(f) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $41,230 |
| Fidelity Securities Lending Cash Central Fund | 720,303 |
| Total | $761,533 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
| Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
| Vostok Emerging Finance Ltd. (depository receipt) | $1,697,310 | $3,320,861 | $-- | $-- | $8,746,849 |
| Total | $1,697,310 | $3,320,861 | $-- | $-- | $8,746,849 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $141,592,920 | $141,592,920 | $-- | $-- |
| Consumer Staples | 86,672,270 | 34,907,924 | 51,764,346 | -- |
| Energy | 16,467,500 | 16,467,500 | -- | -- |
| Financials | 229,127,931 | 196,313,230 | 32,814,701 | -- |
| Health Care | 137,535,824 | 89,292,833 | 48,242,991 | -- |
| Industrials | 245,905,708 | 184,512,125 | 61,393,583 | -- |
| Information Technology | 180,280,860 | 128,495,576 | 51,785,284 | -- |
| Materials | 27,066,208 | 27,066,208 | -- | -- |
| Real Estate | 22,681,903 | 22,681,903 | -- | -- |
| Utilities | 13,543,359 | 13,543,359 | -- | -- |
| Money Market Funds | 6,603,206 | 6,603,206 | -- | -- |
| Total Investments in Securities: | $1,107,477,689 | $861,476,784 | $246,000,905 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $85,486,358 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $6,117,272) — See accompanying schedule:
Unaffiliated issuers (cost $1,121,922,247) | $1,092,127,634 | |
| Fidelity Central Funds (cost $6,602,742) | 6,603,206 | |
| Other affiliated issuers (cost $6,812,018) | 8,746,849 | |
| Total Investments (cost $1,135,337,007) | | $1,107,477,689 |
| Foreign currency held at value (cost $153,461) | | 153,461 |
| Receivable for investments sold | | 3,511,858 |
| Receivable for fund shares sold | | 278,359 |
| Dividends receivable | | 2,806,697 |
| Distributions receivable from Fidelity Central Funds | | 6,563 |
| Prepaid expenses | | 3,061 |
| Other receivables | | 423,422 |
| Total assets | | 1,114,661,110 |
| Liabilities | | |
| Payable for investments purchased | $458,926 | |
| Payable for fund shares redeemed | 1,590,155 | |
| Accrued management fee | 751,469 | |
| Distribution and service plan fees payable | 14,585 | |
| Other affiliated payables | 236,894 | |
| Other payables and accrued expenses | 93,635 | |
| Collateral on securities loaned, at value | 6,433,883 | |
| Total liabilities | | 9,579,547 |
| Net Assets | | $1,105,081,563 |
| Net Assets consist of: | | |
| Paid in capital | | $1,336,948,143 |
| Undistributed net investment income | | 11,516,901 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (215,386,504) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (27,996,977) |
| Net Assets | | $1,105,081,563 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($17,266,603 ÷ 505,352 shares) | | $34.17 |
| Maximum offering price per share (100/94.25 of $34.17) | | $36.25 |
| Class T: | | |
| Net Asset Value and redemption price per share ($6,979,957 ÷ 204,514 shares) | | $34.13 |
| Maximum offering price per share (100/96.50 of $34.13) | | $35.37 |
| Class C: | | |
| Net Asset Value and offering price per share ($9,006,792 ÷ 266,348 shares)(a) | | $33.82 |
| Europe: | | |
| Net Asset Value, offering price and redemption price per share ($1,066,488,228 ÷ 31,126,337 shares) | | $34.26 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($5,339,983 ÷ 155,749 shares) | | $34.29 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $26,678,819 |
| Income from Fidelity Central Funds | | 761,533 |
| Income before foreign taxes withheld | | 27,440,352 |
| Less foreign taxes withheld | | (2,468,243) |
| Total income | | 24,972,109 |
| Expenses | | |
| Management fee | | |
| Basic fee | $8,740,355 | |
| Performance adjustment | 1,346,685 | |
| Transfer agent fees | 2,432,154 | |
| Distribution and service plan fees | 196,334 | |
| Accounting and security lending fees | 577,574 | |
| Custodian fees and expenses | 120,074 | |
| Independent trustees' fees and expenses | 5,629 | |
| Registration fees | 92,430 | |
| Audit | 90,972 | |
| Legal | 7,723 | |
| Interest | 1,290 | |
| Miscellaneous | 11,035 | |
| Total expenses before reductions | 13,622,255 | |
| Expense reductions | (168,284) | 13,453,971 |
| Net investment income (loss) | | 11,518,138 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (10,268,323) | |
| Fidelity Central Funds | 5,266 | |
| Foreign currency transactions | (9,441) | |
| Total net realized gain (loss) | | (10,272,498) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | (89,572,080) | |
| Assets and liabilities in foreign currencies | (354,842) | |
| Total change in net unrealized appreciation (depreciation) | | (89,926,922) |
| Net gain (loss) | | (100,199,420) |
| Net increase (decrease) in net assets resulting from operations | | $(88,681,282) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $11,518,138 | $17,742,695 |
| Net realized gain (loss) | (10,272,498) | 56,856,298 |
| Change in net unrealized appreciation (depreciation) | (89,926,922) | (21,376,933) |
| Net increase (decrease) in net assets resulting from operations | (88,681,282) | 53,222,060 |
| Distributions to shareholders from net investment income | (15,981,681) | (31,603,696) |
| Distributions to shareholders from net realized gain | (5,885,187) | – |
| Total distributions | (21,866,868) | (31,603,696) |
| Share transactions - net increase (decrease) | (219,773,724) | 125,806,049 |
| Redemption fees | 22,478 | 48,244 |
| Total increase (decrease) in net assets | (330,299,396) | 147,472,657 |
| Net Assets | | |
| Beginning of period | 1,435,380,959 | 1,287,908,302 |
| End of period | $1,105,081,563 | $1,435,380,959 |
| Other Information | | |
| Undistributed net investment income end of period | $11,516,901 | $15,983,003 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $37.06 | $36.24 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .22 | .37 | .47 |
| Net realized and unrealized gain (loss) | (2.67) | 1.29 | (3.68) |
| Total from investment operations | (2.45) | 1.66 | (3.21) |
| Distributions from net investment income | (.29) | (.84) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.44) | (.84) | – |
| Redemption fees added to paid in capitalB,C | – | – | – |
| Net asset value, end of period | $34.17 | $37.06 | $36.24 |
| Total ReturnD,E,F | (6.69)% | 4.63% | (8.14)% |
| Ratios to Average Net AssetsG,H | | | |
| Expenses before reductions | 1.39% | 1.33% | 1.35%I |
| Expenses net of fee waivers, if any | 1.39% | 1.33% | 1.35%I |
| Expenses net of all reductions | 1.38% | 1.31% | 1.35%I |
| Net investment income (loss) | .62% | .98% | 1.94%I |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $17,267 | $23,381 | $23,633 |
| Portfolio turnover rateJ | 62% | 87% | 80%K |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $36.94 | $36.18 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .11 | .26 | .40 |
| Net realized and unrealized gain (loss) | (2.67) | 1.29 | (3.67) |
| Total from investment operations | (2.56) | 1.55 | (3.27) |
| Distributions from net investment income | (.09) | (.79) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.25)C | (.79) | – |
| Redemption fees added to paid in capitalB,D | – | – | – |
| Net asset value, end of period | $34.13 | $36.94 | $36.18 |
| Total ReturnE,F,G | (6.99)% | 4.33% | (8.29)% |
| Ratios to Average Net AssetsH,I | | | |
| Expenses before reductions | 1.70% | 1.61% | 1.62%J |
| Expenses net of fee waivers, if any | 1.70% | 1.61% | 1.61%J |
| Expenses net of all reductions | 1.68% | 1.59% | 1.61%J |
| Net investment income (loss) | .31% | .70% | 1.68%J |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $6,980 | $9,632 | $13,679 |
| Portfolio turnover rateK | 62% | 87% | 80%L |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.25 per share is comprised of distributions from net investment income of $.092 and distributions from net realized gain of $.154 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Total returns do not include the effect of the sales charges.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $36.81 | $36.07 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | (.06) | .07 | .29 |
| Net realized and unrealized gain (loss) | (2.65) | 1.29 | (3.67) |
| Total from investment operations | (2.71) | 1.36 | (3.38) |
| Distributions from net investment income | (.12) | (.62) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.28)C | (.62) | – |
| Redemption fees added to paid in capitalB,D | – | – | – |
| Net asset value, end of period | $33.82 | $36.81 | $36.07 |
| Total ReturnE,F,G | (7.43)% | 3.79% | (8.57)% |
| Ratios to Average Net AssetsH,I | | | |
| Expenses before reductions | 2.18% | 2.13% | 2.10%J |
| Expenses net of fee waivers, if any | 2.18% | 2.13% | 2.10%J |
| Expenses net of all reductions | 2.17% | 2.11% | 2.10%J |
| Net investment income (loss) | (.17)% | .18% | 1.19%J |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $9,007 | $11,151 | $6,818 |
| Portfolio turnover rateK | 62% | 87% | 80%L |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.28 per share is comprised of distributions from net investment income of $.123 and distributions from net realized gain of $.154 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Total returns do not include the effect of the contingent deferred sales charge.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $37.19 | $36.32 | $37.92 | $30.15 | $27.67 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .33 | .48 | .94B | .61 | .64 |
| Net realized and unrealized gain (loss) | (2.68) | 1.30 | (2.00) | 7.87 | 2.45 |
| Total from investment operations | (2.35) | 1.78 | (1.06) | 8.48 | 3.09 |
| Distributions from net investment income | (.43) | (.91) | (.52) | (.70) | (.60) |
| Distributions from net realized gain | (.15) | – | (.02) | (.01) | (.02) |
| Total distributions | (.58) | (.91) | (.54) | (.71) | (.61)C |
| Redemption fees added to paid in capitalA,D | – | – | – | – | – |
| Net asset value, end of period | $34.26 | $37.19 | $36.32 | $37.92 | $30.15 |
| Total ReturnE | (6.42)% | 4.97% | (2.82)% | 28.71% | 11.53% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | 1.07% | 1.03% | .97% | 1.06% | .83% |
| Expenses net of fee waivers, if any | 1.07% | 1.03% | .97% | 1.05% | .83% |
| Expenses net of all reductions | 1.06% | 1.01% | .96% | 1.02% | .80% |
| Net investment income (loss) | .94% | 1.28% | 2.43%B | 1.82% | 2.33% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,066,488 | $1,384,134 | $1,237,047 | $957,048 | $602,520 |
| Portfolio turnover rateH | 62% | 87% | 80%I | 59% | 127% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.19 per share. Excluding thi non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.93%.
C Total distributions of $.61 per share is comprised of distributions from net investment income of $.595 and distributions from net realized gain of $.017 per share.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $37.21 | $36.32 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .35 | .50 | .56 |
| Net realized and unrealized gain (loss) | (2.67) | 1.30 | (3.69) |
| Total from investment operations | (2.32) | 1.80 | (3.13) |
| Distributions from net investment income | (.45) | (.91) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.60) | (.91) | – |
| Redemption fees added to paid in capitalB,C | – | – | – |
| Net asset value, end of period | $34.29 | $37.21 | $36.32 |
| Total ReturnD,E | (6.33)% | 5.02% | (7.93)% |
| Ratios to Average Net AssetsF,G | | | |
| Expenses before reductions | 1.01% | .98% | .97%H |
| Expenses net of fee waivers, if any | 1.01% | .98% | .97%H |
| Expenses net of all reductions | 1.00% | .96% | .96%H |
| Net investment income (loss) | 1.00% | 1.33% | 2.33%H |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $5,340 | $6,552 | $5,666 |
| Portfolio turnover rateI | 62% | 87% | 80%J |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Europe Fund (the Fund) is a fund of Fidelity Investment 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, Europe and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs)and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), deferred trustees compensation, expiring capital loss carryforwards, 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 | $95,205,986 |
| Gross unrealized depreciation | (131,418,275) |
| Net unrealized appreciation (depreciation) on securities | $(36,212,289) |
| Tax Cost | $1,143,689,978 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $15,376,217 |
| Capital loss carryforward | $(210,891,559) |
| Net unrealized appreciation (depreciation) on securities and other investments | $(36,349,948) |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(199,044,876) |
| No expiration | |
| Short-term | (11,846,683) |
| Total capital loss carryforward | $(210,891,559) |
Due to large redemptions in a prior period, $199,044,876 of capital losses that existed in the Fund prior to the mergers will be limited to approximately $32,029,274 per year.
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31,2015 |
| Ordinary Income | $21,866,868 | $ 31,603,696 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital. In November 2016, the Board of Trustees approved the elimination of these redemption fees effective December 12, 2016.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $774,962,231 and $1,005,252,770, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Europe as compared to its benchmark index, the MSCI Europe Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .81% 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
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $50,523 | $1,529 |
| Class T | .25% | .25% | 41,037 | 128 |
| Class B | .75% | .25% | 2,439 | 1,885 |
| Class C | .75% | .25% | 102,335 | 24,319 |
| | | | $196,334 | $27,861 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $12,563 |
| Class T | 1,042 |
| Class B(a) | 124 |
| Class C(a) | 3,282 |
| | $17,011 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $53,055 | .26 |
| Class T | 26,058 | .32 |
| Class B | 689 | .29 |
| Class C | 30,814 | .30 |
| Europe | 2,314,244 | .19 |
| Class I | 7,294 | .13 |
| | $2,432,154 | |
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 $35 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $6,488,500 | .60% | $1,290 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,194 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $720,303. 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 $158,326 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $9,958.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $174,443 | $549,660 |
| Class T | 23,347 | 299,142 |
| Class B | – | 18,443 |
| Class C | 38,160 | 108,670 |
| Europe | 15,664,870 | 30,497,764 |
| Class I | 80,861 | 130,017 |
| Total | $15,981,681 | $31,603,696 |
| From net realized gain | | |
| Class A | $94,260 | $– |
| Class T | 39,080 | – |
| Class C | 47,778 | – |
| Europe | 5,676,211 | – |
| Class I | 27,858 | – |
| Total | $5,885,187 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 144,459 | 402,890 | $5,004,460 | $15,313,815 |
| Reinvestment of distributions | 7,044 | 14,493 | 257,822 | 527,143 |
| Shares redeemed | (277,024) | (438,670) | (9,579,027) | (16,388,542) |
| Net increase (decrease) | (125,521) | (21,287) | $(4,316,745) | $(547,584) |
| Class T | | | | |
| Shares sold | 18,157 | 101,998 | $629,088 | $3,848,880 |
| Reinvestment of distributions | 1,677 | 8,153 | 61,481 | 296,280 |
| Shares redeemed | (76,071) | (227,511) | (2,635,140) | (8,571,443) |
| Net increase (decrease) | (56,237) | (117,360) | $(1,944,571) | $(4,426,283) |
| Class B | | | | |
| Shares sold | 183 | 7,973 | $6,069 | $306,370 |
| Reinvestment of distributions | – | 481 | – | 17,468 |
| Shares redeemed | (14,607) | (23,568) | (499,471) | (877,823) |
| Net increase (decrease) | (14,424) | (15,114) | $(493,402) | $(553,985) |
| Class C | | | | |
| Shares sold | 64,049 | 197,774 | $2,232,592 | $7,494,390 |
| Reinvestment of distributions | 2,232 | 2,632 | 81,438 | 95,708 |
| Shares redeemed | (102,859) | (86,511) | (3,518,604) | (3,194,278) |
| Net increase (decrease) | (36,578) | 113,895 | $(1,204,574) | $4,395,820 |
| Europe | | | | |
| Shares sold | 2,489,815 | 10,168,406 | $86,835,858 | $387,319,779 |
| Reinvestment of distributions | 559,844 | 803,462 | 20,484,708 | 29,241,922 |
| Shares redeemed | (9,143,028) | (7,807,853) | (318,516,566) | (290,372,067) |
| Net increase (decrease) | (6,093,369) | 3,164,015 | $(211,196,000) | $126,189,634 |
| Class I | | | | |
| Shares sold | 73,750 | 130,676 | $2,648,638 | $4,946,083 |
| Reinvestment of distributions | 2,803 | 2,526 | 102,586 | 91,940 |
| Shares redeemed | (96,879) | (113,122) | (3,369,656) | (4,289,576) |
| Net increase (decrease) | (20,326) | 20,080 | $(618,432) | $748,447 |
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.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and Shareholders of Fidelity Europe Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Europe Fund (a fund of Fidelity Investment Trust) at October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Europe Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Class A | 1.38% | | | |
| Actual | | $1,000.00 | $951.50 | $6.77 |
| Hypothetical-C | | $1,000.00 | $1,018.20 | $7.00 |
| Class T | 1.69% | | | |
| Actual | | $1,000.00 | $949.90 | $8.28 |
| Hypothetical-C | | $1,000.00 | $1,016.64 | $8.57 |
| Class C | 2.17% | | | |
| Actual | | $1,000.00 | $947.90 | $10.63 |
| Hypothetical-C | | $1,000.00 | $1,014.23 | $10.99 |
| Europe | 1.06% | | | |
| Actual | | $1,000.00 | $952.70 | $5.20 |
| Hypothetical-C | | $1,000.00 | $1,019.81 | $5.38 |
| Class I | .99% | | | |
| Actual | | $1,000.00 | $953.30 | $4.86 |
| Hypothetical-C | | $1,000.00 | $1,020.16 | $5.03 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Europe Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity Europe Fund | | | | |
| Class A | 12/19/16 | 12/16/16 | $0.224 | $0.126 |
| Class T | 12/19/16 | 12/16/16 | $0.091 | $0.126 |
| Class C | 12/19/16 | 12/16/16 | $0.000 | $0.000 |
| Europe | 12/19/16 | 12/16/16 | $0.382 | $0.126 |
| Class I | 12/19/16 | 12/16/16 | $0.408 | $0.126 |
|
Class A, Class T, Class C, Europe, and Class I designates 100% of dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity Europe Fund | | | |
| Class A | 12/07/15 | $0.4943 | $0.0553 |
| Class T | 12/07/15 | $0.3013 | $0.0553 |
| Class C | 12/07/15 | $0.3323 | $0.0553 |
| Europe | 12/07/15 | $0.6343 | $0.0553 |
| Class I | 12/07/15 | $0.6563 | $0.0553 |
|
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Europe Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there were portfolio management changes for the fund in December 2013 and September 2014.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe. Returns of the benchmark index are "net MA," i.e., adjusted for tax withholding rates applicable to U.S.-based funds organized as Massachusetts business trusts.
Fidelity Europe Fund
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Fidelity Europe Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class I, and the retail class ranked below the competitive median for 2015 and the total expense ratio of each of Class T and Class C ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although some classes were above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
AEUF-ANN-1216
1.9585993.102
Fidelity Advisor® Japan Fund - Class A, Class T, Class C and Class I
Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® Japan Fund |
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Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
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Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 0.43% | 5.61% | (0.65)% |
| Class T (incl. 3.50% sales charge) | 2.43% | 5.80% | (0.59)% |
| Class C (incl. contingent deferred sales charge) | 4.69% | 6.10% | (0.48)% |
| Class I | 6.77% | 7.24% | 0.15% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on December 14, 2010. Returns prior to December 14, 2010, are those of Fidelity® Japan Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to December 14, 2010, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on December 14, 2010. Returns prior to December 14, 2010, are those of Fidelity® Japan Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to December 14, 2010, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on December 14, 2010. Returns prior to December 14, 2010, are those of Fidelity® Japan Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to December 14, 2010, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on December 14, 2010. Returns prior to December 14, 2010 are those of Fidelity® Japan Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Japan Fund - Class A on October 31, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the Tokyo Stock Price Index (TOPIX) performed over the same period.
See above for additional information regarding the performance of Class A.
| Period Ending Values |
| $9,373 | Fidelity Advisor® Japan Fund - Class A |
| $11,698 | Tokyo Stock Price Index (TOPIX) |
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Kirk Neureiter: For the year, the fund’s share classes (excluding sales charges, if applicable) recorded single-digit gains that outpaced the 4.97% return of the benchmark Tokyo Stock Price Index by about 1 to 2 percentage points. Versus the benchmark, the fund was helped by stock selection in industrials, positioning in financials and a zero-weighting in the lagging utilities sector. A positive fair-value adjustment of 0.93 percentage points also lifted relative results. Our top relative contributor was DeNA, a provider of online gaming and e-commerce services. Our overweighting here proved timely, as the stock more than doubled in value this period. A second beneficial overweighting was Toshiba Plant Systems & Services, a company that builds and maintains power plants. KDDI, another relative contributor, is one of Japan’s major telecommunication-services providers and was the fund’s largest holding at period end. An out-of-benchmark stake in Sompo Care Message – which I sold – also rewarded us. Conversely, my picks in information technology weighed on relative performance. To a lesser extent, consumer discretionary and real estate decisions also hurt. An overweighting in real estate company Mitsui Fudosan was our largest relative detractor; I eliminated the position prior to period end. Tech-hardware maker Hitachi – also sold – hurt as well, as did our overweighting in East Japan Railway.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Japan | 98.3% |
| | United States of America* | 1.1% |
| | Cayman Islands | 0.6% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Japan | 98.1% |
| | Cayman Islands | 1.0% |
| | United States of America* | 0.9% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 98.9 | 99.1 |
| Short-Term Investments and Net Other Assets (Liabilities) | 1.1 | 0.9 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| KDDI Corp. (Wireless Telecommunication Services) | 4.4 | 4.1 |
| SoftBank Corp. (Wireless Telecommunication Services) | 3.7 | 3.1 |
| Astellas Pharma, Inc. (Pharmaceuticals) | 3.7 | 5.0 |
| ORIX Corp. (Diversified Financial Services) | 3.6 | 3.3 |
| Sony Corp. (Household Durables) | 3.6 | 2.6 |
| Mitsubishi UFJ Financial Group, Inc. (Banks) | 3.3 | 3.1 |
| Hoya Corp. (Health Care Equipment & Supplies) | 3.2 | 3.3 |
| East Japan Railway Co. (Road & Rail) | 3.0 | 4.2 |
| Honda Motor Co. Ltd. (Automobiles) | 2.6 | 2.4 |
| Suzuki Motor Corp. (Automobiles) | 2.5 | 1.9 |
| | 33.6 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Consumer Discretionary | 21.2 | 20.3 |
| Industrials | 14.1 | 12.7 |
| Information Technology | 13.2 | 12.7 |
| Health Care | 12.3 | 13.5 |
| Financials | 11.6 | 16.4 |
| Consumer Staples | 11.1 | 9.9 |
| Telecommunication Services | 9.9 | 9.1 |
| Materials | 5.2 | 4.5 |
| Real Estate | 0.3 | 0.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 98.9% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 21.2% | | | |
| Auto Components - 3.8% | | | |
| Bridgestone Corp. | | 143,900 | $5,372,065 |
| DaikyoNishikawa Corp. | | 125,600 | 1,624,045 |
| Hi-Lex Corp. | | 17,200 | 470,716 |
| NGK Spark Plug Co. Ltd. | | 214,300 | 4,242,269 |
| Sumitomo Electric Industries Ltd. | | 249,000 | 3,690,955 |
| | | | 15,400,050 |
| Automobiles - 6.8% | | | |
| Fuji Heavy Industries Ltd. | | 89,600 | 3,497,877 |
| Honda Motor Co. Ltd. | | 352,800 | 10,556,349 |
| Isuzu Motors Ltd. | | 255,600 | 3,167,276 |
| Suzuki Motor Corp. | | 284,700 | 10,126,166 |
| | | | 27,347,668 |
| Hotels, Restaurants & Leisure - 0.8% | | | |
| Skylark Co. Ltd. | | 230,600 | 3,247,794 |
| Household Durables - 5.2% | | | |
| Casio Computer Co. Ltd. (a) | | 189,200 | 2,644,867 |
| Rinnai Corp. | | 41,200 | 3,967,960 |
| Sony Corp. | | 457,600 | 14,422,750 |
| | | | 21,035,577 |
| Internet & Direct Marketing Retail - 1.5% | | | |
| Rakuten, Inc. | | 317,600 | 3,672,070 |
| Start Today Co. Ltd. | | 123,900 | 2,178,617 |
| | | | 5,850,687 |
| Media - 1.1% | | | |
| Dentsu, Inc. | | 40,200 | 2,008,658 |
| NEXT Co. Ltd. (a) | | 211,100 | 1,779,464 |
| Proto Corp. | | 62,400 | 708,077 |
| | | | 4,496,199 |
| Multiline Retail - 0.5% | | | |
| Don Quijote Holdings Co. Ltd. | | 50,700 | 1,931,406 |
| Specialty Retail - 1.5% | | | |
| Nitori Holdings Co. Ltd. | | 15,600 | 1,869,858 |
| USS Co. Ltd. | | 179,400 | 3,041,606 |
| Xebio Holdings Co. Ltd. | | 78,700 | 1,223,989 |
| | | | 6,135,453 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 85,444,834 |
|
| CONSUMER STAPLES - 11.1% | | | |
| Beverages - 1.5% | | | |
| Asahi Group Holdings | | 166,200 | 5,944,657 |
| Food & Staples Retailing - 6.1% | | | |
| Ain Holdings, Inc. | | 39,300 | 2,656,975 |
| San-A Co. Ltd. | | 49,600 | 2,705,369 |
| Seven & i Holdings Co. Ltd. | | 182,500 | 7,627,515 |
| Sundrug Co. Ltd. | | 50,800 | 4,006,065 |
| Tsuruha Holdings, Inc. | | 22,800 | 2,635,034 |
| Welcia Holdings Co. Ltd. | | 74,700 | 5,107,266 |
| | | | 24,738,224 |
| Food Products - 0.1% | | | |
| Japan Meat Co. Ltd. | | 31,900 | 449,283 |
| Personal Products - 1.0% | | | |
| Kao Corp. | | 77,400 | 3,989,196 |
| Tobacco - 2.4% | | | |
| Japan Tobacco, Inc. | | 249,700 | 9,509,887 |
|
| TOTAL CONSUMER STAPLES | | | 44,631,247 |
|
| FINANCIALS - 11.6% | | | |
| Banks - 4.3% | | | |
| Mitsubishi UFJ Financial Group, Inc. | | 2,551,400 | 13,164,743 |
| Shinsei Bank Ltd. | | 2,594,000 | 4,205,016 |
| | | | 17,369,759 |
| Capital Markets - 0.5% | | | |
| Monex Group, Inc. | | 833,700 | 1,915,912 |
| Diversified Financial Services - 4.0% | | | |
| Kyushu Railway Co. | | 50,600 | 1,490,932 |
| ORIX Corp. | | 912,300 | 14,488,754 |
| | | | 15,979,686 |
| Insurance - 2.8% | | | |
| Sony Financial Holdings, Inc. | | 201,600 | 2,837,433 |
| Tokio Marine Holdings, Inc. | | 217,800 | 8,616,880 |
| | | | 11,454,313 |
|
| TOTAL FINANCIALS | | | 46,719,670 |
|
| HEALTH CARE - 12.3% | | | |
| Biotechnology - 0.6% | | | |
| PeptiDream, Inc. (a)(b) | | 44,300 | 2,289,559 |
| Health Care Equipment & Supplies - 5.5% | | | |
| Hoya Corp. | | 310,500 | 12,983,146 |
| Olympus Corp. | | 259,300 | 9,272,194 |
| | | | 22,255,340 |
| Health Care Providers & Services - 2.0% | | | |
| Miraca Holdings, Inc. | | 71,800 | 3,478,059 |
| Ship Healthcare Holdings, Inc. | | 140,300 | 4,113,879 |
| Solasto Corp. | | 45,300 | 504,101 |
| | | | 8,096,039 |
| Pharmaceuticals - 4.2% | | | |
| Astellas Pharma, Inc. | | 990,400 | 14,699,381 |
| Shionogi & Co. Ltd. | | 42,500 | 2,098,455 |
| | | | 16,797,836 |
|
| TOTAL HEALTH CARE | | | 49,438,774 |
|
| INDUSTRIALS - 14.1% | | | |
| Building Products - 1.5% | | | |
| Daikin Industries Ltd. | | 64,500 | 6,199,676 |
| Construction & Engineering - 1.1% | | | |
| Toshiba Plant Systems & Services Corp. | | 265,900 | 4,297,707 |
| Electrical Equipment - 3.6% | | | |
| Mitsubishi Electric Corp. | | 447,000 | 6,063,293 |
| Nidec Corp. | | 88,900 | 8,621,274 |
| | | | 14,684,567 |
| Machinery - 2.4% | | | |
| Komatsu Ltd. | | 61,500 | 1,368,935 |
| Kubota Corp. | | 219,600 | 3,548,319 |
| Makita Corp. | | 65,700 | 4,554,582 |
| | | | 9,471,836 |
| Professional Services - 0.7% | | | |
| Benefit One, Inc. | | 35,900 | 1,040,679 |
| Outsourcing, Inc. | | 51,500 | 1,959,426 |
| | | | 3,000,105 |
| Road & Rail - 3.0% | | | |
| East Japan Railway Co. | | 136,400 | 12,040,191 |
| Trading Companies & Distributors - 1.8% | | | |
| Misumi Group, Inc. | | 321,800 | 5,882,432 |
| Mitsui & Co. Ltd. | | 89,500 | 1,244,312 |
| | | | 7,126,744 |
|
| TOTAL INDUSTRIALS | | | 56,820,826 |
|
| INFORMATION TECHNOLOGY - 13.2% | | | |
| Electronic Equipment & Components - 6.9% | | | |
| Alps Electric Co. Ltd. | | 20,600 | 495,013 |
| Azbil Corp. | | 162,900 | 4,846,458 |
| Iriso Electronics Co. Ltd. | | 18,100 | 997,597 |
| Murata Manufacturing Co. Ltd. | | 18,700 | 2,615,896 |
| OMRON Corp. | | 55,600 | 2,136,626 |
| Shimadzu Corp. | | 613,000 | 8,937,513 |
| TDK Corp. | | 55,400 | 3,835,263 |
| Topcon Corp. | | 259,500 | 3,887,427 |
| | | | 27,751,793 |
| Internet Software & Services - 3.6% | | | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 23,400 | 2,379,546 |
| DeNA Co. Ltd. | | 158,100 | 5,095,623 |
| Kakaku.com, Inc. | | 411,900 | 6,932,426 |
| | | | 14,407,595 |
| IT Services - 0.3% | | | |
| Otsuka Corp. | | 25,900 | 1,234,862 |
| Semiconductors & Semiconductor Equipment - 0.9% | | | |
| Sumco Corp. | | 367,100 | 3,857,578 |
| Software - 1.5% | | | |
| COLOPL, Inc. (a) | | 117,000 | 1,688,004 |
| Nintendo Co. Ltd. | | 17,600 | 4,242,659 |
| | | | 5,930,663 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 53,182,491 |
|
| MATERIALS - 5.2% | | | |
| Chemicals - 5.2% | | | |
| Daicel Chemical Industries Ltd. | | 208,300 | 2,748,996 |
| Hitachi Chemical Co. Ltd. | | 134,900 | 3,164,432 |
| Kansai Paint Co. Ltd. | | 172,100 | 3,708,840 |
| Shin-Etsu Chemical Co. Ltd. | | 87,600 | 6,658,335 |
| Toray Industries, Inc. | | 524,000 | 4,890,733 |
| | | | 21,171,336 |
| REAL ESTATE - 0.3% | | | |
| Equity Real Estate Investment Trusts (REITs) - 0.3% | | | |
| Invincible Investment Corp. | | 2,530 | 1,230,380 |
| TELECOMMUNICATION SERVICES - 9.9% | | | |
| Diversified Telecommunication Services - 1.8% | | | |
| Nippon Telegraph & Telephone Corp. | | 161,300 | 7,151,532 |
| Wireless Telecommunication Services - 8.1% | | | |
| KDDI Corp. | | 580,800 | 17,652,357 |
| SoftBank Corp. | | 240,400 | 15,140,662 |
| | | | 32,793,019 |
|
| TOTAL TELECOMMUNICATION SERVICES | | | 39,944,551 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $353,862,189) | | | 398,584,109 |
|
| Money Market Funds - 1.7% | | | |
| Fidelity Cash Central Fund, 0.41% (c) | | 736,671 | 736,892 |
| Fidelity Securities Lending Cash Central Fund 0.48% (c)(d) | | 6,257,647 | 6,258,898 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $6,995,387) | | | 6,995,790 |
| TOTAL INVESTMENT PORTFOLIO - 100.6% | | | |
| (Cost $360,857,576) | | | 405,579,899 |
| NET OTHER ASSETS (LIABILITIES) - (0.6)% | | | (2,431,690) |
| NET ASSETS - 100% | | | $403,148,209 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $5,453 |
| Fidelity Securities Lending Cash Central Fund | 124,193 |
| Total | $129,646 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $85,444,834 | $60,465,735 | $24,979,099 | $-- |
| Consumer Staples | 44,631,247 | 44,631,247 | -- | -- |
| Financials | 46,719,670 | 33,554,927 | 13,164,743 | -- |
| Health Care | 49,438,774 | 34,739,393 | 14,699,381 | -- |
| Industrials | 56,820,826 | 55,451,891 | 1,368,935 | -- |
| Information Technology | 53,182,491 | 48,939,832 | 4,242,659 | -- |
| Materials | 21,171,336 | 21,171,336 | -- | -- |
| Real Estate | 1,230,380 | 1,230,380 | -- | -- |
| Telecommunication Services | 39,944,551 | -- | 39,944,551 | -- |
| Money Market Funds | 6,995,790 | 6,995,790 | -- | -- |
| Total Investments in Securities: | $405,579,899 | $307,180,531 | $98,399,368 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $300,425,826 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $5,953,091) — See accompanying schedule:
Unaffiliated issuers (cost $353,862,189) | $398,584,109 | |
| Fidelity Central Funds (cost $6,995,387) | 6,995,790 | |
| Total Investments (cost $360,857,576) | | $405,579,899 |
| Receivable for investments sold | | 1,625,758 |
| Receivable for fund shares sold | | 1,020,188 |
| Dividends receivable | | 2,396,916 |
| Distributions receivable from Fidelity Central Funds | | 15,643 |
| Prepaid expenses | | 1,054 |
| Other receivables | | 700 |
| Total assets | | 410,640,158 |
| Liabilities | | |
| Payable for investments purchased | $401,493 | |
| Payable for fund shares redeemed | 489,133 | |
| Accrued management fee | 169,088 | |
| Distribution and service plan fees payable | 19,365 | |
| Other affiliated payables | 82,996 | |
| Other payables and accrued expenses | 71,758 | |
| Collateral on securities loaned, at value | 6,258,116 | |
| Total liabilities | | 7,491,949 |
| Net Assets | | $403,148,209 |
| Net Assets consist of: | | |
| Paid in capital | | $553,719,763 |
| Undistributed net investment income | | 3,364,219 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (198,564,073) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 44,628,300 |
| Net Assets | | $403,148,209 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($23,909,966 ÷ 1,899,417 shares) | | $12.59 |
| Maximum offering price per share (100/94.25 of $12.59) | | $13.36 |
| Class T: | | |
| Net Asset Value and redemption price per share ($4,192,527 ÷ 333,633 shares) | | $12.57 |
| Maximum offering price per share (100/96.50 of $12.57) | | $13.03 |
| Class C: | | |
| Net Asset Value and offering price per share ($15,076,897 ÷ 1,211,579 shares)(a) | | $12.44 |
| Japan: | | |
| Net Asset Value, offering price and redemption price per share ($352,936,346 ÷ 27,916,051 shares) | | $12.64 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($7,032,473 ÷ 557,040 shares) | | $12.62 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $7,837,925 |
| Income from Fidelity Central Funds | | 129,646 |
| Income before foreign taxes withheld | | 7,967,571 |
| Less foreign taxes withheld | | (785,680) |
| Total income | | 7,181,891 |
| Expenses | | |
| Management fee | | |
| Basic fee | $3,155,826 | |
| Performance adjustment | (931,093) | |
| Transfer agent fees | 880,448 | |
| Distribution and service plan fees | 252,555 | |
| Accounting and security lending fees | 234,932 | |
| Custodian fees and expenses | 49,872 | |
| Independent trustees' fees and expenses | 2,044 | |
| Registration fees | 81,205 | |
| Audit | 78,931 | |
| Legal | 1,537 | |
| Interest | 1,981 | |
| Miscellaneous | 3,993 | |
| Total expenses before reductions | 3,812,231 | |
| Expense reductions | (5,833) | 3,806,398 |
| Net investment income (loss) | | 3,375,493 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (20,161,579) | |
| Fidelity Central Funds | 1,060 | |
| Foreign currency transactions | 213,018 | |
| Total net realized gain (loss) | | (19,947,501) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 35,434,261 | |
| Assets and liabilities in foreign currencies | (75,691) | |
| Total change in net unrealized appreciation (depreciation) | | 35,358,570 |
| Net gain (loss) | | 15,411,069 |
| Net increase (decrease) in net assets resulting from operations | | $18,786,562 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $3,375,493 | $3,112,183 |
| Net realized gain (loss) | (19,947,501) | (392,382) |
| Change in net unrealized appreciation (depreciation) | 35,358,570 | 1,937,241 |
| Net increase (decrease) in net assets resulting from operations | 18,786,562 | 4,657,042 |
| Distributions to shareholders from net investment income | (3,027,093) | (3,310,432) |
| Distributions to shareholders from net realized gain | (270,338) | – |
| Total distributions | (3,297,431) | (3,310,432) |
| Share transactions - net increase (decrease) | (159,708,771) | 70,904,089 |
| Redemption fees | 43,507 | 139,156 |
| Total increase (decrease) in net assets | (144,176,133) | 72,389,855 |
| Net Assets | | |
| Beginning of period | 547,324,342 | 474,934,487 |
| End of period | $403,148,209 | $547,324,342 |
| Other Information | | |
| Undistributed net investment income end of period | $3,364,219 | $3,017,018 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.87 | $11.65 | $12.00 | $9.30 | $9.54 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .06 | .04 | .05 | .08 | .09 |
| Net realized and unrealized gain (loss) | .72 | .23 | (.31) | 2.80 | (.15) |
| Total from investment operations | .78 | .27 | (.26) | 2.88 | (.06) |
| Distributions from net investment income | (.05) | (.05) | (.08) | (.11) | (.13) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.06) | (.05) | (.09) | (.19) | (.18) |
| Redemption fees added to paid in capitalA | –B | –B | –B | .01 | –B |
| Net asset value, end of period | $12.59 | $11.87 | $11.65 | $12.00 | $9.30 |
| Total ReturnC,D | 6.56% | 2.31% | (2.18)% | 31.58% | (.64)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.08% | 1.10% | 1.23% | 1.26% | 1.42% |
| Expenses net of fee waivers, if any | 1.08% | 1.10% | 1.23% | 1.26% | 1.38% |
| Expenses net of all reductions | 1.08% | 1.09% | 1.23% | 1.25% | 1.36% |
| Net investment income (loss) | .51% | .37% | .41% | .75% | .94% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $23,910 | $23,918 | $21,352 | $20,520 | $9,495 |
| Portfolio turnover rateG | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.85 | $11.62 | $11.96 | $9.28 | $9.51 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .02 | –B | .01 | .05 | .06 |
| Net realized and unrealized gain (loss) | .71 | .23 | (.30) | 2.78 | (.13) |
| Total from investment operations | .73 | .23 | (.29) | 2.83 | (.07) |
| Distributions from net investment income | –B | – | (.04) | (.08) | (.11) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.01) | – | (.05) | (.16) | (.16) |
| Redemption fees added to paid in capitalA | –B | –B | –B | .01 | –B |
| Net asset value, end of period | $12.57 | $11.85 | $11.62 | $11.96 | $9.28 |
| Total ReturnC,D | 6.15% | 1.98% | (2.42)% | 31.04% | (.75)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.44% | 1.43% | 1.54% | 1.55% | 1.70% |
| Expenses net of fee waivers, if any | 1.44% | 1.43% | 1.54% | 1.55% | 1.66% |
| Expenses net of all reductions | 1.44% | 1.42% | 1.54% | 1.53% | 1.64% |
| Net investment income (loss) | .16% | .04% | .10% | .46% | .66% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $4,193 | $4,809 | $4,104 | $5,357 | $3,934 |
| Portfolio turnover rateG | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.77 | $11.58 | $11.96 | $9.25 | $9.48 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | (.02) | (.04) | (.03) | –B | .02 |
| Net realized and unrealized gain (loss) | .69 | .23 | (.32) | 2.79 | (.14) |
| Total from investment operations | .67 | .19 | (.35) | 2.79 | (.12) |
| Distributions from net investment income | – | – | (.03) | (.01) | (.06) |
| Distributions from net realized gain | – | – | (.01) | (.08) | (.05) |
| Total distributions | – | – | (.03)C | (.09) | (.11) |
| Redemption fees added to paid in capitalA | –B | –B | –B | .01 | –B |
| Net asset value, end of period | $12.44 | $11.77 | $11.58 | $11.96 | $9.25 |
| Total ReturnD,E | 5.69% | 1.64% | (2.90)% | 30.55% | (1.27)% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | 1.81% | 1.81% | 1.93% | 1.97% | 2.15% |
| Expenses net of fee waivers, if any | 1.81% | 1.81% | 1.93% | 1.97% | 2.11% |
| Expenses net of all reductions | 1.81% | 1.80% | 1.93% | 1.95% | 2.09% |
| Net investment income (loss) | (.21)% | (.34)% | (.29)% | .04% | .21% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $15,077 | $18,491 | $13,162 | $11,824 | $7,015 |
| Portfolio turnover rateH | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total distributions of $.03 per share is comprised of distributions from net investment income of $.025 and distributions from net realized gain of $.009 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.91 | $11.69 | $12.03 | $9.34 | $9.57 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .09 | .08 | .09 | .12 | .12 |
| Net realized and unrealized gain (loss) | .72 | .23 | (.32) | 2.79 | (.14) |
| Total from investment operations | .81 | .31 | (.23) | 2.91 | (.02) |
| Distributions from net investment income | (.07) | (.09) | (.11) | (.15) | (.16) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.08) | (.09) | (.11)B | (.23) | (.21) |
| Redemption fees added to paid in capitalA | –C | –C | –C | .01 | –C |
| Net asset value, end of period | $12.64 | $11.91 | $11.69 | $12.03 | $9.34 |
| Total ReturnD | 6.80% | 2.66% | (1.90)% | 31.92% | (.19)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .78% | .80% | .90% | .93% | 1.09% |
| Expenses net of fee waivers, if any | .78% | .80% | .90% | .93% | 1.06% |
| Expenses net of all reductions | .78% | .79% | .90% | .91% | 1.04% |
| Net investment income (loss) | .81% | .67% | .74% | 1.08% | 1.26% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $352,936 | $485,803 | $415,612 | $480,773 | $353,550 |
| Portfolio turnover rateG | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.11 per share is comprised of distributions from net investment income of $.105 and distributions from net realized gain of $.009 per share.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.89 | $11.67 | $12.02 | $9.33 | $9.57 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .10 | .08 | .09 | .13 | .12 |
| Net realized and unrealized gain (loss) | .70 | .23 | (.32) | 2.78 | (.14) |
| Total from investment operations | .80 | .31 | (.23) | 2.91 | (.02) |
| Distributions from net investment income | (.07) | (.09) | (.12) | (.15) | (.17) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.07)B | (.09) | (.12)C | (.23) | (.22) |
| Redemption fees added to paid in capitalA | –D | –D | –D | .01 | –D |
| Net asset value, end of period | $12.62 | $11.89 | $11.67 | $12.02 | $9.33 |
| Total ReturnE | 6.77% | 2.72% | (1.90)% | 32.04% | (.18)% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | .77% | .80% | .89% | .90% | 1.03% |
| Expenses net of fee waivers, if any | .77% | .80% | .89% | .90% | 1.01% |
| Expenses net of all reductions | .76% | .79% | .89% | .88% | .99% |
| Net investment income (loss) | .83% | .67% | .76% | 1.11% | 1.31% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $7,032 | $13,957 | $20,253 | $20,033 | $1,488 |
| Portfolio turnover rateH | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.07 per share is comprised of distributions from net investment income of .065 and distributions from net realized gain of $.006 per share.
C Total distributions of $.12 per share is comprised of distributions from net investment income of $.115 and distributions from net realized gain of $.009 per share.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Japan Fund (the Fund) is a fund of Fidelity Investment 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, Japan and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. 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. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive-foreign investment companies (PFIC), expiring capital loss carryforwards, 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 | $62,245,810 |
| Gross unrealized depreciation | (22,000,840) |
| Net unrealized appreciation (depreciation) on securities | $40,244,970 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $4,358,745 |
| Capital loss carryforward | $(195,080,291) |
| Net unrealized appreciation (depreciation) on securities and other investments | $40,150,155 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(41,604,069) |
| 2018 | (26,887,863) |
| 2019 | (98,806,037) |
| Total with expiration | (167,297,969) |
| No expiration | |
| Short-term | (10,932,314) |
| Long-term | (16,850,008) |
| Total no expiration | (27,782,322) |
| Total capital loss carryforward | $(195,080,291) |
Due to large redemptions in a prior period, $141,955,883 of capital losses that will be available to offset future capital gains of the Fund will be limited to approximately $18,885,324 per year.
The Fund acquired $1,617,303 of its capital loss carryforward as part of a merger in a prior period. The losses acquired that will be available to offset future capital gains of the Fund will be limited to approximately $1,371,973 per year.
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $3,297,431 | $ 3,310,432 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $66,643,788 and $222,810,669, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Japan as compared to its benchmark index, the TOPIX, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .49% 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
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $64,315 | $15,057 |
| Class T | .25% | .25% | 22,238 | 73 |
| Class B | .75% | .25% | 1,473 | 1,107 |
| Class C | .75% | .25% | 164,529 | 50,712 |
| | | | $252,555 | $66,949 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $5,740 |
| Class T | 1,209 |
| Class B(a) | 48 |
| Class C(a) | 8,824 |
| | $15,821 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $61,063 | .24 |
| Class T | 15,235 | .34 |
| Class B | 416 | .29 |
| Class C | 35,044 | .21 |
| Japan | 755,481 | .19 |
| Class I | 13,209 | .17 |
| | $880,448 | |
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 $109 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $3,216,750 | .62% | $1,981 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,143 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $124,193. 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 $1,905 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $3,928.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $121,415 | $79,823 |
| Class T | 822 | – |
| Japan | 2,828,514 | 3,066,127 |
| Class I | 76,342 | 164,482 |
| Total | $3,027,093 | $3,310,432 |
| From net realized gain | | |
| Class A | $14,867 | $– |
| Class T | 2,466 | – |
| Japan | 245,958 | – |
| Class I | 7,047 | – |
| Total | $270,338 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 813,081 | 1,104,408 | $9,592,333 | $13,420,485 |
| Reinvestment of distributions | 10,746 | 6,565 | 128,096 | 74,452 |
| Shares redeemed | (938,856) | (929,216) | (10,914,042) | (10,724,499) |
| Net increase (decrease) | (115,029) | 181,757 | $(1,193,613) | $2,770,438 |
| Class T | | | | |
| Shares sold | 36,363 | 180,232 | $424,255 | $2,170,519 |
| Reinvestment of distributions | 269 | – | 3,216 | – |
| Shares redeemed | (108,870) | (127,640) | (1,266,529) | (1,490,023) |
| Net increase (decrease) | (72,238) | 52,592 | $(839,058) | $680,496 |
| Class B | | | | |
| Shares sold | 1,967 | 711 | $21,930 | $8,779 |
| Shares redeemed | (31,378) | (10,106) | (356,692) | (116,253) |
| Net increase (decrease) | (29,411) | (9,395) | $(334,762) | $(107,474) |
| Class C | | | | |
| Shares sold | 261,804 | 747,753 | $3,054,392 | $8,932,993 |
| Shares redeemed | (621,443) | (312,924) | (7,129,408) | (3,580,602) |
| Net increase (decrease) | (359,639) | 434,829 | $(4,075,016) | $5,352,391 |
| Japan | | | | |
| Shares sold | 4,048,778 | 18,408,352 | $48,328,822 | $225,875,166 |
| Reinvestment of distributions | 251,274 | 262,630 | 3,000,214 | 2,980,854 |
| Shares redeemed | (17,176,238) | (13,426,033) | (197,588,759) | (161,325,584) |
| Net increase (decrease) | (12,876,186) | 5,244,949 | $(146,259,723) | $67,530,436 |
| Class I | | | | |
| Shares sold | 323,014 | 1,688,546 | $3,826,994 | $20,578,143 |
| Reinvestment of distributions | 6,575 | 14,222 | 78,372 | 161,134 |
| Shares redeemed | (946,812) | (2,263,385) | (10,911,965) | (26,061,475) |
| Net increase (decrease) | (617,223) | (560,617) | $(7,006,599) | $(5,322,198) |
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.
At the end of the period, Strategic Advisers International Fund and Strategic Advisers International II Fund were the owners of record of approximately 18% and 19%, respectively, of the total outstanding shares of the Fund. Mutual Funds managed by the investment adviser or its affiliates were the owners of record, in the aggregate, of approximately 46% of the total outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and Shareholders of Fidelity Japan Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Japan Fund (a fund of Fidelity Investment Trust) at October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Japan Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Class A | 1.07% | | | |
| Actual | | $1,000.00 | $1,111.20 | $5.68 |
| Hypothetical-C | | $1,000.00 | $1,019.76 | $5.43 |
| Class T | 1.42% | | | |
| Actual | | $1,000.00 | $1,109.40 | $7.53 |
| Hypothetical-C | | $1,000.00 | $1,018.00 | $7.20 |
| Class C | 1.78% | | | |
| Actual | | $1,000.00 | $1,106.80 | $9.43 |
| Hypothetical-C | | $1,000.00 | $1,016.19 | $9.02 |
| Japan | .77% | | | |
| Actual | | $1,000.00 | $1,111.70 | $4.09 |
| Hypothetical-C | | $1,000.00 | $1,021.27 | $3.91 |
| Class I | .74% | | | |
| Actual | | $1,000.00 | $1,111.90 | $3.93 |
| Hypothetical-C | | $1,000.00 | $1,021.42 | $3.76 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Japan Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity Japan Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.060 | $0.034 |
| Class T | 12/12/16 | 12/09/16 | $0.010 | $0.034 |
| Class C | 12/12/16 | 12/09/16 | $0.000 | $0.000 |
| Japan | 12/12/16 | 12/09/16 | $0.112 | $0.034 |
| Class I | 12/12/16 | 12/09/16 | $0.110 | $0.034 |
|
Class A, Class T, Japan and Class I designate 100% of the dividend distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity Japan Fund | | | |
| Class A | 12/07/15 | $0.0727 | $0.0177 |
| Class T | 12/07/15 | $0.0257 | $0.0177 |
| Japan | 12/07/15 | $0.0927 | $0.0177 |
| Class I | 12/07/15 | $0.0887 | $0.0177 |
|
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Japan Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.
Fidelity Japan Fund
The Board has discussed the fund's underperformance with FMR and has engaged with FMR to consider what steps might be taken to remediate the fund's underperformance. The Board noted that there was a portfolio management change for the fund in March 2014.
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group is broader than the Broadridge peer group used by the Board for performance comparisons because the Total Mapped Group combines several Broadridge investment objective categories while the Broadridge peer group does not. The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Fidelity Japan Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class C, Class I, and the retail class of the fund ranked below the competitive median for 2015 and the total expense ratio of Class T ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although Class T was above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
AJPNA-ANN-1216
1.917389.105
Fidelity Advisor® Latin America Fund - Class A, Class T, Class C and Class I
Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® Latin America Fund |
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Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 19.03% | (9.38)% | (1.23)% |
| Class T (incl. 3.50% sales charge) | 21.52% | (9.20)% | (1.16)% |
| Class C (incl. contingent deferred sales charge) | 24.31% | (8.99)% | (1.09)% |
| Class I | 26.77% | (7.99)% | (0.44)% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on September 28, 2010. Returns prior to September 28, 2010, are those of Fidelity® Latin America Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to September 28, 2010, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on September 28, 2010. Returns prior to September 28, 2010, are those of Fidelity® Latin America Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to September 28, 2010, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on September 28, 2010. Returns prior to September 28, 2010, are those of Fidelity® Latin America Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to September 28, 2010, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on September 28, 2010. Returns prior to September 28, 2010 are those of Fidelity® Latin America Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Latin America Fund - Class A on October 31, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the MSCI EM (Emerging Markets) Latin America Index performed over the same period.
See above for additional information regarding the performance of Class A.
| Period Ending Values |
| $8,837 | Fidelity Advisor® Latin America Fund - Class A |
| $13,217 | MSCI EM (Emerging Markets) Latin America Index |
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Will Pruett: For the year, the fund’s share classes (excluding sales charges, if applicable) trailed the 33.71% return of the benchmark MSCI Emerging Markets Latin America Index by roughly 7 to 8 percentage points. Relative results were hampered by unfavorable positioning in Brazil, mainly within the strong-performing materials sector and among highly levered domestic cyclicals, including banks. Here, underweighting the strong-performing bank Banco Bradesco was the fund's biggest detractor by far, followed by a less-than-benchmark stake in state-owned oil giant Petroleo Brasieiro, also known as Petrobras. Conversely, stock picking in the consumer discretionary sector was beneficial, as were choices in the industrials sector’s capital goods group, although to a lesser extent. The fund’s top individual contributors were names I chose to underweight. America Movil, a Mexico-based telecommunications firm, returned -20% this period. Wal-Mart de Mexico was another notable contributor, as the stock also lost ground this period. I sold out of both names on valuation concerns in January when I took over the fund. Banco Bradesco was also sold by period end.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Note to shareholders: Will Pruett became sole Portfolio Manager of the fund on January 1, 2016, after having previously served as Co-Manager.
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Brazil | 57.9% |
| | Mexico | 22.8% |
| | Bermuda | 4.8% |
| | Panama | 4.0% |
| | United States of America* | 2.6% |
| | Argentina | 2.1% |
| | United Kingdom | 2.0% |
| | France | 1.5% |
| | Peru | 1.2% |
| | Other | 1.1% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Brazil | 45.5% |
| | Mexico | 30.6% |
| | United States of America* | 8.4% |
| | Chile | 3.8% |
| | Bermuda | 3.7% |
| | Panama | 2.6% |
| | United Kingdom | 1.4% |
| | Spain | 1.0% |
| | Peru | 1.0% |
| | Other | 2.0% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.1 | 96.6 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.9 | 3.4 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Itau Unibanco Holding SA (Brazil, Banks) | 10.2 | 8.0 |
| Petroleo Brasileiro SA - Petrobras (PN) (non-vtg.) (Brazil, Oil, Gas & Consumable Fuels) | 6.5 | 2.3 |
| Ambev SA (Brazil, Beverages) | 6.1 | 0.0 |
| Grupo Financiero Banorte S.A.B. de CV Series O (Mexico, Banks) | 4.9 | 5.0 |
| Itausa-Investimentos Itau SA (PN) (Brazil, Banks) | 4.5 | 3.5 |
| Cielo SA (Brazil, IT Services) | 3.7 | 3.9 |
| Credicorp Ltd. (United States) (Bermuda, Banks) | 3.6 | 3.7 |
| Kroton Educacional SA (Brazil, Diversified Consumer Services) | 3.5 | 2.6 |
| BB Seguridade Participacoes SA (Brazil, Insurance) | 2.8 | 2.5 |
| Smiles SA (Brazil, Media) | 2.7 | 1.8 |
| | 48.5 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Financials | 39.2 | 35.2 |
| Consumer Discretionary | 17.3 | 14.5 |
| Consumer Staples | 13.3 | 16.4 |
| Industrials | 9.4 | 10.2 |
| Energy | 6.5 | 2.3 |
| Information Technology | 4.9 | 5.9 |
| Health Care | 4.3 | 6.2 |
| Utilities | 1.9 | 1.5 |
| Materials | 1.2 | 3.6 |
| Real Estate | 1.1 | 0.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Latin American market. As of October 31, 2016, 26.9% of the Fund’s total assets were invested in the Diversified Banks industry, which accounts for more than 20% of the Latin American market.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 76.7% | | | |
| | | Shares | Value |
| Argentina - 2.1% | | | |
| Grupo Financiero Galicia SA sponsored ADR | | 202,608 | $6,309,213 |
| Grupo Superveille SA sponsored ADR (a) | | 475,000 | 7,210,500 |
|
| TOTAL ARGENTINA | | | 13,519,713 |
|
| Bermuda - 4.8% | | | |
| Credicorp Ltd. (United States) | | 151,821 | 22,572,746 |
| PAX Global Technology Ltd. (a) | | 12,476,240 | 7,802,124 |
|
| TOTAL BERMUDA | | | 30,374,870 |
|
| Brazil - 35.5% | | | |
| Ambev SA | | 6,567,532 | 38,742,678 |
| BB Seguridade Participacoes SA | | 1,762,780 | 17,749,295 |
| Cielo SA | | 2,277,207 | 23,114,507 |
| CVC Brasil Operadora e Agencia de Viagens SA | | 1,814,733 | 13,928,872 |
| Equatorial Energia SA | | 668,406 | 11,923,257 |
| Estacio Participacoes SA | | 2,421,505 | 14,041,998 |
| FPC Par Corretora de Seguros | | 1,809,373 | 8,553,709 |
| Grendene SA | | 1,679,603 | 10,323,876 |
| Kroton Educacional SA | | 4,457,759 | 22,205,003 |
| MAHLE Metal Leve SA | | 1,138,576 | 7,893,699 |
| Multiplus SA | | 796,822 | 10,804,028 |
| Qualicorp SA | | 2,460,713 | 15,834,287 |
| Smiles SA | | 930,784 | 16,988,558 |
| Tegma Gestao Logistica SA (b) | | 2,562,627 | 6,454,737 |
| Valid Solucoes SA | | 659,175 | 6,176,668 |
|
| TOTAL BRAZIL | | | 224,735,172 |
|
| Chile - 1.1% | | | |
| Vina San Pedro SA | | 574,573,084 | 6,649,785 |
| France - 1.5% | | | |
| Edenred SA | | 419,118 | 9,710,132 |
| Mexico - 22.8% | | | |
| Compartamos S.A.B. de CV | | 7,444,573 | 14,691,422 |
| Credito Real S.A.B. de CV | | 4,204,186 | 7,722,837 |
| Genomma Lab Internacional SA de CV (b) | | 9,725,099 | 11,633,484 |
| Gruma S.A.B. de CV Series B | | 751,554 | 10,427,757 |
| Grupo Aeroportuario Norte S.A.B. de CV | | 1,138,679 | 6,625,074 |
| Grupo Financiero Banorte S.A.B. de CV Series O | | 5,233,321 | 30,819,584 |
| Grupo GICSA SA de CV (b) | | 10,205,012 | 6,900,167 |
| Kimberly-Clark de Mexico SA de CV Series A | | 7,148,566 | 15,415,880 |
| Megacable Holdings S.A.B. de CV unit | | 1,796,523 | 6,531,774 |
| Promotora y Operadora de Infraestructura S.A.B. de CV | | 1,551,159 | 14,607,205 |
| Qualitas Controladora S.A.B. de CV | | 4,954,982 | 9,091,518 |
| Unifin Financiera SAPI de CV | | 3,407,489 | 10,160,631 |
|
| TOTAL MEXICO | | | 144,627,333 |
|
| Panama - 4.0% | | | |
| Copa Holdings SA Class A | | 171,117 | 15,782,121 |
| Intergroup Financial Services Corp. | | 314,911 | 9,825,223 |
|
| TOTAL PANAMA | | | 25,607,344 |
|
| Peru - 1.2% | | | |
| Cementos Pacasmayo SAA | | 3,812,245 | 7,367,205 |
| United Kingdom - 2.0% | | | |
| British American Tobacco PLC (United Kingdom) | | 221,491 | 12,694,302 |
| United States of America - 1.7% | | | |
| First Cash Financial Services, Inc. | | 221,675 | 10,463,060 |
| TOTAL COMMON STOCKS | | | |
| (Cost $389,289,536) | | | 485,748,916 |
|
| Nonconvertible Preferred Stocks - 22.4% | | | |
| Brazil - 22.4% | | | |
| Alpargatas SA (PN) | | 2,325,383 | 7,729,422 |
| Itau Unibanco Holding SA | | 5,389,489 | 64,835,957 |
| Itausa-Investimentos Itau SA (PN) | | 9,677,029 | 28,618,783 |
| Petroleo Brasileiro SA - Petrobras (PN) (non-vtg.) (b) | | 7,364,950 | 40,816,405 |
| TOTAL NONCONVERTIBLE PREFERRED STOCKS | | | |
| (Cost $73,702,351) | | | 142,000,567 |
|
| Money Market Funds - 1.7% | | | |
| Fidelity Cash Central Fund, 0.41% (c) | | 7,696,911 | 7,699,220 |
| Fidelity Securities Lending Cash Central Fund 0.48% (c)(d) | | 3,078,421 | 3,079,036 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $10,775,455) | | | 10,778,256 |
| TOTAL INVESTMENT PORTFOLIO - 100.8% | | | |
| (Cost $473,767,342) | | | 638,527,739 |
| NET OTHER ASSETS (LIABILITIES) - (0.8)% | | | (5,106,372) |
| NET ASSETS - 100% | | | $633,421,367 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $40,904 |
| Fidelity Securities Lending Cash Central Fund | 53,768 |
| Total | $94,672 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $110,447,230 | $110,447,230 | $-- | $-- |
| Consumer Staples | 83,930,402 | 71,236,100 | 12,694,302 | -- |
| Energy | 40,816,405 | 40,816,405 | -- | -- |
| Financials | 248,624,478 | 248,624,478 | -- | -- |
| Health Care | 27,467,771 | 27,467,771 | -- | -- |
| Industrials | 59,355,937 | 59,355,937 | -- | -- |
| Information Technology | 30,916,631 | 30,916,631 | -- | -- |
| Materials | 7,367,205 | 7,367,205 | -- | -- |
| Real Estate | 6,900,167 | 6,900,167 | -- | -- |
| Utilities | 11,923,257 | 11,923,257 | -- | -- |
| Money Market Funds | 10,778,256 | 10,778,256 | -- | -- |
| Total Investments in Securities: | $638,527,739 | $625,833,437 | $12,694,302 | $-- |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $2,884,288) — See accompanying schedule:
Unaffiliated issuers (cost $462,991,887) | $627,749,483 | |
| Fidelity Central Funds (cost $10,775,455) | 10,778,256 | |
| Total Investments (cost $473,767,342) | | $638,527,739 |
| Receivable for investments sold | | 1,428,891 |
| Receivable for fund shares sold | | 764,699 |
| Dividends receivable | | 542,971 |
| Distributions receivable from Fidelity Central Funds | | 14,678 |
| Prepaid expenses | | 1,486 |
| Other receivables | | 1,645 |
| Total assets | | 641,282,109 |
| Liabilities | | |
| Payable for investments purchased | $3,505,497 | |
| Payable for fund shares redeemed | 604,756 | |
| Accrued management fee | 361,441 | |
| Distribution and service plan fees payable | 12,339 | |
| Other affiliated payables | 162,441 | |
| Other payables and accrued expenses | 135,768 | |
| Collateral on securities loaned, at value | 3,078,500 | |
| Total liabilities | | 7,860,742 |
| Net Assets | | $633,421,367 |
| Net Assets consist of: | | |
| Paid in capital | | $636,343,447 |
| Undistributed net investment income | | 7,710,475 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (175,411,098) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 164,778,543 |
| Net Assets | | $633,421,367 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($19,114,774 ÷ 851,405 shares) | | $22.45 |
| Maximum offering price per share (100/94.25 of $22.45) | | $23.82 |
| Class T: | | |
| Net Asset Value and redemption price per share ($7,377,589 ÷ 328,319 shares) | | $22.47 |
| Maximum offering price per share (100/96.50 of $22.47) | | $23.28 |
| Class C: | | |
| Net Asset Value and offering price per share ($6,589,974 ÷ 291,411 shares)(a) | | $22.61 |
| Latin America: | | |
| Net Asset Value, offering price and redemption price per share ($596,514,428 ÷ 26,613,893 shares) | | $22.41 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($3,824,602 ÷ 170,776 shares) | | $22.40 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $19,138,493 |
| Income from Fidelity Central Funds | | 94,672 |
| Income before foreign taxes withheld | | 19,233,165 |
| Less foreign taxes withheld | | (910,667) |
| Total income | | 18,322,498 |
| Expenses | | |
| Management fee | $3,611,588 | |
| Transfer agent fees | 1,507,375 | |
| Distribution and service plan fees | 124,708 | |
| Accounting and security lending fees | 264,748 | |
| Custodian fees and expenses | 346,298 | |
| Independent trustees' fees and expenses | 2,289 | |
| Registration fees | 83,027 | |
| Audit | 79,297 | |
| Legal | 1,567 | |
| Interest | 882 | |
| Miscellaneous | 5,010 | |
| Total expenses before reductions | 6,026,789 | |
| Expense reductions | (33,716) | 5,993,073 |
| Net investment income (loss) | | 12,329,425 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (87,561,727) | |
| Fidelity Central Funds | 1,234 | |
| Foreign currency transactions | (422,119) | |
| Total net realized gain (loss) | | (87,982,612) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 203,504,980 | |
| Assets and liabilities in foreign currencies | 57,819 | |
| Total change in net unrealized appreciation (depreciation) | | 203,562,799 |
| Net gain (loss) | | 115,580,187 |
| Net increase (decrease) in net assets resulting from operations | | $127,909,612 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $12,329,425 | $10,341,112 |
| Net realized gain (loss) | (87,982,612) | (87,419,393) |
| Change in net unrealized appreciation (depreciation) | 203,562,799 | (231,042,995) |
| Net increase (decrease) in net assets resulting from operations | 127,909,612 | (308,121,276) |
| Distributions to shareholders from net investment income | (10,264,003) | (12,592,762) |
| Distributions to shareholders from net realized gain | – | (66,395,306) |
| Total distributions | (10,264,003) | (78,988,068) |
| Share transactions - net increase (decrease) | 5,109,952 | (98,503,600) |
| Redemption fees | 103,536 | 127,133 |
| Total increase (decrease) in net assets | 122,859,097 | (485,485,811) |
| Net Assets | | |
| Beginning of period | 510,562,270 | 996,048,081 |
| End of period | $633,421,367 | $510,562,270 |
| Other Information | | |
| Undistributed net investment income end of period | $7,710,475 | $7,012,875 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.09 | $30.31 | $40.71 | $48.95 | $52.38 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .40 | .28 | .49 | .72 | .92 |
| Net realized and unrealized gain (loss) | 4.27 | (10.11) | (4.08) | (4.73) | (3.66) |
| Total from investment operations | 4.67 | (9.83) | (3.59) | (4.01) | (2.74) |
| Distributions from net investment income | (.31) | (.31) | (.57) | (.79) | (.70) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.31) | (2.39) | (6.82) | (4.24) | (.70) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.45 | $18.09 | $30.31 | $40.71 | $48.95 |
| Total ReturnC,D | 26.29% | (34.60)% | (9.06)% | (8.93)% | (5.23)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.40% | 1.40% | 1.38% | 1.37% | 1.35% |
| Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.38% | 1.37% | 1.35% |
| Expenses net of all reductions | 1.39% | 1.39% | 1.38% | 1.35% | 1.35% |
| Net investment income (loss) | 2.14% | 1.26% | 1.52% | 1.66% | 1.80% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $19,115 | $16,424 | $34,898 | $48,464 | $69,654 |
| Portfolio turnover rateG | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.11 | $30.33 | $40.68 | $48.88 | $52.27 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .35 | .22 | .40 | .61 | .78 |
| Net realized and unrealized gain (loss) | 4.27 | (10.13) | (4.08) | (4.74) | (3.65) |
| Total from investment operations | 4.62 | (9.91) | (3.68) | (4.13) | (2.87) |
| Distributions from net investment income | (.26) | (.23) | (.43) | (.63) | (.53) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.26) | (2.31) | (6.68) | (4.08) | (.53) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.47 | $18.11 | $30.33 | $40.68 | $48.88 |
| Total ReturnC,D | 25.93% | (34.78)% | (9.30)% | (9.17)% | (5.49)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.68% | 1.67% | 1.65% | 1.63% | 1.61% |
| Expenses net of fee waivers, if any | 1.68% | 1.67% | 1.65% | 1.63% | 1.61% |
| Expenses net of all reductions | 1.68% | 1.66% | 1.65% | 1.61% | 1.61% |
| Net investment income (loss) | 1.86% | .99% | 1.25% | 1.40% | 1.54% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $7,378 | $5,284 | $9,761 | $12,705 | $19,334 |
| Portfolio turnover rateG | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.18 | $30.37 | $40.59 | $48.73 | $52.05 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .26 | .11 | .25 | .40 | .54 |
| Net realized and unrealized gain (loss) | 4.30 | (10.17) | (4.07) | (4.74) | (3.64) |
| Total from investment operations | 4.56 | (10.06) | (3.82) | (4.34) | (3.10) |
| Distributions from net investment income | (.13) | (.05) | (.16) | (.36) | (.23) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.13) | (2.13) | (6.41) | (3.81) | (.23) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.61 | $18.18 | $30.37 | $40.59 | $48.73 |
| Total ReturnC,D | 25.31% | (35.08)% | (9.74)% | (9.62)% | (5.94)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 2.15% | 2.15% | 2.13% | 2.12% | 2.10% |
| Expenses net of fee waivers, if any | 2.14% | 2.15% | 2.13% | 2.12% | 2.10% |
| Expenses net of all reductions | 2.14% | 2.15% | 2.13% | 2.10% | 2.10% |
| Net investment income (loss) | 1.39% | .51% | .77% | .91% | 1.06% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $6,590 | $5,394 | $11,349 | $15,185 | $27,405 |
| Portfolio turnover rateG | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.08 | $30.34 | $40.80 | $49.09 | $52.48 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .45 | .34 | .59 | .87 | 1.09 |
| Net realized and unrealized gain (loss) | 4.26 | (10.11) | (4.10) | (4.74) | (3.67) |
| Total from investment operations | 4.71 | (9.77) | (3.51) | (3.87) | (2.58) |
| Distributions from net investment income | (.38) | (.41) | (.71) | (.98) | (.82) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.38) | (2.49) | (6.96) | (4.43) | (.82) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.41 | $18.08 | $30.34 | $40.80 | $49.09 |
| Total ReturnC | 26.65% | (34.45)% | (8.79)% | (8.63)% | (4.91)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.14% | 1.13% | 1.08% | 1.04% | 1.02% |
| Expenses net of fee waivers, if any | 1.14% | 1.12% | 1.08% | 1.04% | 1.02% |
| Expenses net of all reductions | 1.13% | 1.12% | 1.07% | 1.03% | 1.02% |
| Net investment income (loss) | 2.40% | 1.53% | 1.83% | 1.99% | 2.14% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $596,514 | $481,005 | $933,298 | $1,324,748 | $2,274,601 |
| Portfolio turnover rateF | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.08 | $30.35 | $40.79 | $49.07 | $52.51 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .46 | .36 | .60 | .87 | 1.08 |
| Net realized and unrealized gain (loss) | 4.26 | (10.13) | (4.07) | (4.74) | (3.67) |
| Total from investment operations | 4.72 | (9.77) | (3.47) | (3.87) | (2.59) |
| Distributions from net investment income | (.40) | (.42) | (.73) | (.97) | (.86) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.40) | (2.50) | (6.98) | (4.42) | (.86) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.40 | $18.08 | $30.35 | $40.79 | $49.07 |
| Total ReturnC | 26.77% | (34.42)% | (8.69)% | (8.63)% | (4.93)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.07% | 1.06% | 1.04% | 1.03% | 1.04% |
| Expenses net of fee waivers, if any | 1.07% | 1.06% | 1.04% | 1.03% | 1.04% |
| Expenses net of all reductions | 1.06% | 1.05% | 1.04% | 1.01% | 1.04% |
| Net investment income (loss) | 2.47% | 1.60% | 1.86% | 2.00% | 2.12% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $3,825 | $1,828 | $4,531 | $5,131 | $7,928 |
| Portfolio turnover rateF | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Latin America Fund (the Fund) is a non-diversified fund of Fidelity Investment 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, Latin America and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards, deferred trustees compensation, 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 | $173,272,430 |
| Gross unrealized depreciation | (11,656,235) |
| Net unrealized appreciation (depreciation) on securities | $161,616,195 |
| Tax Cost | $476,911,544 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $7,709,003 |
| Capital loss carryforward | $(172,266,895) |
| Net unrealized appreciation (depreciation) on securities and other investments | $161,636,251 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(44,509,664) |
| Long-term | (127,757,231) |
| Total capital loss carryforward | $(172,266,895) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $10,264,003 | $ 13,610,992 |
| Long-term Capital Gains | – | 65,377,076 |
| Total | $10,264,003 | $ 78,988,068 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $564,954,966 and $549,686,328, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| | Distribution
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $39,659 | $– |
| Class T | .25% | .25% | 28,255 | – |
| Class B | .75% | .25% | 2,961 | 2,221 |
| Class C | .75% | .25% | 53,833 | 5,002 |
| | | | $124,708 | $7,223 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $6,559 |
| Class T | 4,271 |
| Class B(a) | 48 |
| Class C(a) | 583 |
| | $11,461 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $48,105 | .30 |
| Class T | 19,103 | .34 |
| Class B | 821 | .28 |
| Class C | 16,255 | .30 |
| Latin America | 1,416,462 | .29 |
| Class I | 6,629 | .22 |
| | $1,507,375 | |
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 $7,154 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $7,287,286 | .62% | $882 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,313 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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 $53,768, including $303 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 $30,351 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $3,365.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $264,922 | $341,444 |
| Class T | 74,433 | 71,167 |
| Class B | 1,059 | – |
| Class C | 37,419 | 18,114 |
| Latin America | 9,833,214 | 12,109,807 |
| Class I | 52,956 | 52,230 |
| Total | $10,264,003 | $12,592,762 |
| From net realized gain | | |
| Class A | $– | $2,330,553 |
| Class T | – | 658,521 |
| Class B | – | 144,042 |
| Class C | – | 754,025 |
| Latin America | – | 62,251,897 |
| Class I | – | 256,268 |
| Total | $– | $66,395,306 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 225,272 | 218,330 | $4,334,307 | $4,910,163 |
| Reinvestment of distributions | 14,810 | 103,775 | 256,538 | 2,587,573 |
| Shares redeemed | (296,685) | (565,352) | (5,448,405) | (12,518,797) |
| Net increase (decrease) | (56,603) | (243,247) | $(857,560) | $(5,021,061) |
| Class T | | | | |
| Shares sold | 88,506 | 29,946 | $1,738,665 | $658,518 |
| Reinvestment of distributions | 4,243 | 28,508 | 73,689 | 713,357 |
| Shares redeemed | (56,211) | (88,493) | (1,058,502) | (1,990,592) |
| Net increase (decrease) | 36,538 | (30,039) | $753,852 | $(618,717) |
| Class B | | | | |
| Shares sold | 1 | 116 | $10 | $2,989 |
| Reinvestment of distributions | 59 | 5,261 | 1,009 | 133,376 |
| Shares redeemed | (34,427) | (43,584) | (635,494) | (982,322) |
| Net increase (decrease) | (34,367) | (38,207) | $(634,475) | $(845,957) |
| Class C | | | | |
| Shares sold | 75,193 | 48,350 | $1,418,728 | $1,099,271 |
| Reinvestment of distributions | 1,720 | 25,875 | 30,044 | 652,617 |
| Shares redeemed | (82,272) | (151,109) | (1,513,384) | (3,411,105) |
| Net increase (decrease) | (5,359) | (76,884) | $(64,612) | $(1,659,217) |
| Latin America | | | | |
| Shares sold | 5,528,011 | 2,736,036 | $106,883,642 | $60,647,605 |
| Reinvestment of distributions | 545,601 | 2,862,287 | 9,420,593 | 71,197,829 |
| Shares redeemed | (6,058,036) | (9,758,242) | (111,613,300) | (221,025,945) |
| Net increase (decrease) | 15,576 | (4,159,919) | $4,690,935 | $(89,180,511) |
| Class I | | | | |
| Shares sold | 136,401 | 41,136 | $2,463,122 | $906,993 |
| Reinvestment of distributions | 2,787 | 11,139 | 48,070 | 276,862 |
| Shares redeemed | (69,501) | (100,491) | (1,289,380) | (2,361,992) |
| Net increase (decrease) | 69,687 | (48,216) | $1,221,812 | $(1,178,137) |
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.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and Shareholders of Fidelity Latin America Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Latin America Fund (a fund of Fidelity Investment Trust) at October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Latin America Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Class A | 1.38% | | | |
| Actual | | $1,000.00 | $1,163.80 | $7.51 |
| Hypothetical-C | | $1,000.00 | $1,018.20 | $7.00 |
| Class T | 1.66% | | | |
| Actual | | $1,000.00 | $1,162.40 | $9.02 |
| Hypothetical-C | | $1,000.00 | $1,016.79 | $8.42 |
| Class C | 2.13% | | | |
| Actual | | $1,000.00 | $1,159.50 | $11.56 |
| Hypothetical-C | | $1,000.00 | $1,014.43 | $10.79 |
| Latin America | 1.11% | | | |
| Actual | | $1,000.00 | $1,165.40 | $6.04 |
| Hypothetical-C | | $1,000.00 | $1,019.56 | $5.63 |
| Class I | 1.03% | | | |
| Actual | | $1,000.00 | $1,166.70 | $5.61 |
| Hypothetical-C | | $1,000.00 | $1,019.96 | $5.23 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
Class A designates 67% and 25%; Class T designates 78% and 25%; Class B designates 100% and 25%; Class C designates 100% and 25%; Latin America designates 56% and 25% and Class I designates 52% and 25% of the dividends distributed on December 4, 2015 and December 28, 2015, respectively, during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity Latin America Fund | | | |
| Class A | 12/07/15 | $0.3341 | $0.0571 |
| Class A | 12/29/15 | $0.0280 | $0.0000 |
| Class T | 12/07/15 | $0.2881 | $0.0571 |
| Class T | 12/29/15 | $0.0280 | $0.0000 |
| Class B | 12/07/15 | $0.0631 | $0.0571 |
| Class B | 12/29/15 | $0.0280 | $0.0000 |
| Class C | 12/07/15 | $0.1611 | $0.0571 |
| Class C | 12/29/15 | $0.0280 | $0.0000 |
| Latin America | 12/07/15 | $0.4041 | $0.0571 |
| Latin America | 12/29/15 | $0.0280 | $0.0000 |
| Class I | 12/07/15 | $0.4291 | $0.0571 |
| Class I | 12/29/15 | $0.0280 | $0.0000 |
|
The funds will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Latin America Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there were portfolio management changes for the fund in October 2015 and December 2015.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one-, three-, and five-year periods, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.
Fidelity Latin America Fund
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and considered by the Board.
Fidelity Latin America Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class C, Class I, and the retail class of the fund ranked below the competitive median for 2015 and the total expense ratio of Class T ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although Class T was above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
FALAA-ANN-1216
1.917418.106
Fidelity® Emerging Markets Fund Class K
Annual Report October 31, 2016 |
|
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-835-5092 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class K | 8.27% | 2.78% | 2.55% |
The initial offering of Class K shares took place on May 9, 2008. Returns prior to May 9, 2008 are those of Fidelity® Emerging Markets Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Emerging Markets Fund - Class K on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI Emerging Markets Index performed over the same period.
See above for additional information regarding the performance of Class K.
| Period Ending Values |
| $12,863 | Fidelity® Emerging Markets Fund - Class K |
| $14,551 | MSCI Emerging Markets Index |
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Sammy Simnegar: For the year, the fund’s share classes returned slightly more than 8%, lagging the 9.67% return of the benchmark MSCI Emerging Markets Index. Versus the benchmark, sector positioning undercut favorable stock selection, particularly an overweighting in consumer staples and an underweighting in energy. Health care was a mixed bag, with favorable stock picks offset by the negative impact of a large overweighting. Geographically, my picks in Brazil and India hurt relative performance. The fund’s largest relative detractor was Petroleo Brasileiro – also known as Petrobras – Brazil’s large state-owned energy producer. We didn’t own Petrobras and so didn’t participate in this benchmark component’s 161% return. Other detractors included South Korea’s Samsung Electronics, a strong-performing index name we didn’t own for much of the period, and Brazilian bank Banco Bradesco, where our untimely ownership hurt. I sold Banco Bradesco from the fund by period end. Conversely, stock picking in consumer discretionary and financials added value. On a country basis, positioning in China helped. Our top relative contributor was a non-benchmark stake in Brazil-based Smiles, a firm that manages customer loyalty programs. The fund's overweighted holdings in two for-profit education companies, China-based TAL Education Group and Brazil’s Kroton Educacional, also proved timely.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Cayman Islands | 13.4% |
| | India | 11.5% |
| | United States of America* | 10.6% |
| | Brazil | 8.9% |
| | Korea (South) | 7.8% |
| | South Africa | 7.5% |
| | Mexico | 7.3% |
| | Taiwan | 6.0% |
| | Indonesia | 3.6% |
| | Other | 23.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | India | 13.5% |
| | United States of America* | 11.6% |
| | Cayman Islands | 9.4% |
| | Mexico | 8.5% |
| | Brazil | 8.3% |
| | South Africa | 6.8% |
| | Korea (South) | 5.5% |
| | Taiwan | 5.2% |
| | Philippines | 3.9% |
| | Other | 27.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.2 | 98.7 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.8 | 1.3 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Tencent Holdings Ltd. (Cayman Islands, Internet Software & Services) | 4.2 | 3.4 |
| Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan, Semiconductors & Semiconductor Equipment) | 4.2 | 3.6 |
| Samsung Electronics Co. Ltd. (Korea (South), Technology Hardware, Storage & Peripherals) | 3.4 | 0.0 |
| Alibaba Group Holding Ltd. sponsored ADR (Cayman Islands, Internet Software & Services) | 3.2 | 1.6 |
| Naspers Ltd. Class N (South Africa, Media) | 2.4 | 2.0 |
| Baidu.com, Inc. sponsored ADR (Cayman Islands, Internet Software & Services) | 1.7 | 1.3 |
| Itau Unibanco Holding SA (Brazil, Banks) | 1.5 | 1.2 |
| Housing Development Finance Corp. Ltd. (India, Thrifts & Mortgage Finance) | 1.3 | 1.2 |
| Ambev SA sponsored ADR (Brazil, Beverages) | 1.2 | 1.2 |
| NAVER Corp. (Korea (South), Internet Software & Services) | 1.1 | 1.0 |
| | 24.2 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 26.2 | 21.7 |
| Financials | 16.8 | 18.4 |
| Consumer Staples | 16.0 | 13.8 |
| Consumer Discretionary | 13.5 | 14.2 |
| Industrials | 8.2 | 9.8 |
| Health Care | 7.6 | 8.3 |
| Materials | 4.6 | 5.8 |
| Utilities | 2.7 | 3.3 |
| Real Estate | 1.7 | 0.0 |
| Energy | 1.4 | 2.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 94.9% | | | |
| | | Shares | Value |
| Argentina - 1.1% | | | |
| Banco Macro SA sponsored ADR | | 281,800 | $21,481,614 |
| Grupo Financiero Galicia SA sponsored ADR (a) | | 624,700 | 19,453,158 |
|
| TOTAL ARGENTINA | | | 40,934,772 |
|
| Australia - 0.9% | | | |
| Amcor Ltd. | | 1,462,104 | 16,349,671 |
| Sydney Airport unit | | 3,796,776 | 18,080,179 |
|
| TOTAL AUSTRALIA | | | 34,429,850 |
|
| Belgium - 0.5% | | | |
| Anheuser-Busch InBev SA NV | | 147,100 | 16,882,632 |
| Bermuda - 2.8% | | | |
| Axalta Coating Systems (b) | | 642,200 | 16,132,064 |
| Cheung Kong Infrastructure Holdings Ltd. | | 2,116,000 | 17,338,783 |
| China Gas Holdings Ltd. | | 12,302,000 | 18,749,107 |
| China Resource Gas Group Ltd. | | 6,441,000 | 20,222,724 |
| Credicorp Ltd. (United States) | | 194,732 | 28,952,754 |
|
| TOTAL BERMUDA | | | 101,395,432 |
|
| Brazil - 5.4% | | | |
| BB Seguridade Participacoes SA | | 2,441,820 | 24,586,496 |
| CCR SA | | 3,763,400 | 20,455,824 |
| Cielo SA | | 2,698,754 | 27,393,368 |
| Kroton Educacional SA | | 4,983,260 | 24,822,630 |
| Odontoprev SA | | 4,079,694 | 15,337,195 |
| Qualicorp SA | | 3,044,100 | 19,588,288 |
| Smiles SA | | 1,032,200 | 18,839,590 |
| Ultrapar Participacoes SA | | 1,185,600 | 26,865,429 |
| Weg SA | | 4,003,990 | 22,077,138 |
|
| TOTAL BRAZIL | | | 199,965,958 |
|
| Cayman Islands - 13.4% | | | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 1,161,900 | 118,153,611 |
| Baidu.com, Inc. sponsored ADR (b) | | 355,400 | 62,856,044 |
| Ctrip.com International Ltd. ADR (b) | | 720,100 | 31,792,415 |
| NetEase, Inc. ADR | | 136,500 | 35,079,135 |
| New Oriental Education & Technology Group, Inc. sponsored ADR | | 483,300 | 24,227,829 |
| Shenzhou International Group Holdings Ltd. | | 3,402,000 | 22,568,728 |
| Sino Biopharmaceutical Ltd. | | 32,397,000 | 22,682,558 |
| TAL Education Group ADR (a)(b) | | 250,400 | 20,392,576 |
| Tencent Holdings Ltd. | | 5,811,800 | 154,026,280 |
|
| TOTAL CAYMAN ISLANDS | | | 491,779,176 |
|
| China - 1.9% | | | |
| Inner Mongoli Yili Industries Co. Ltd. (A Shares) | | 6,457,008 | 17,143,595 |
| Jiangsu Hengrui Medicine Co. Ltd. (A Shares) | | 2,853,125 | 19,428,435 |
| Kweichow Moutai Co. Ltd. (A Shares) | | 368,892 | 17,310,017 |
| Shanghai International Airport Co. Ltd. (A Shares) | | 4,278,600 | 17,118,694 |
|
| TOTAL CHINA | | | 71,000,741 |
|
| France - 0.4% | | | |
| Dassault Systemes SA | | 207,462 | 16,429,265 |
| Germany - 0.5% | | | |
| Wirecard AG (a) | | 368,663 | 17,489,102 |
| Hong Kong - 2.3% | | | |
| AIA Group Ltd. | | 3,042,200 | 19,201,177 |
| CSPC Pharmaceutical Group Ltd. | | 22,438,000 | 23,260,958 |
| Guangdong Investment Ltd. | | 14,667,000 | 22,164,416 |
| Techtronic Industries Co. Ltd. | | 4,964,500 | 18,691,569 |
|
| TOTAL HONG KONG | | | 83,318,120 |
|
| India - 10.7% | | | |
| Amara Raja Batteries Ltd. | | 1,242,781 | 18,860,968 |
| Asian Paints Ltd. | | 1,259,949 | 20,208,535 |
| Colgate-Palmolive Ltd. | | 1,172,862 | 17,110,606 |
| Divi's Laboratories Ltd. | | 988,451 | 18,965,743 |
| Eicher Motors Ltd. | | 55,469 | 19,973,861 |
| GlaxoSmithKline Consumer Healthcare Ltd. | | 191,006 | 17,406,756 |
| Godrej Consumer Products Ltd. | | 882,934 | 21,298,546 |
| HDFC Bank Ltd. | | 845,121 | 18,885,099 |
| Hindustan Unilever Ltd. | | 1,701,741 | 21,340,181 |
| Housing Development Finance Corp. Ltd. | | 2,273,814 | 47,439,406 |
| IndusInd Bank Ltd. | | 997,879 | 17,948,387 |
| ITC Ltd. | | 7,753,207 | 28,255,632 |
| LIC Housing Finance Ltd. | | 2,368,838 | 20,694,566 |
| Power Grid Corp. of India Ltd. | | 6,881,239 | 18,145,593 |
| Sun Pharmaceutical Industries Ltd. | | 2,246,132 | 25,032,056 |
| Tata Consultancy Services Ltd. | | 834,250 | 29,999,280 |
| Titan Co. Ltd. | | 1,980,527 | 11,090,936 |
| Zee Entertainment Enterprises Ltd. | | 2,490,320 | 19,426,269 |
|
| TOTAL INDIA | | | 392,082,420 |
|
| Indonesia - 3.6% | | | |
| PT ACE Hardware Indonesia Tbk | | 224,374,400 | 14,702,645 |
| PT Bank Central Asia Tbk | | 26,238,400 | 31,219,433 |
| PT Bank Rakyat Indonesia Tbk | | 31,293,900 | 29,260,084 |
| PT Kalbe Farma Tbk | | 149,536,200 | 19,941,216 |
| PT Matahari Department Store Tbk | | 14,915,400 | 20,604,697 |
| PT Surya Citra Media Tbk | | 88,330,500 | 17,939,594 |
|
| TOTAL INDONESIA | | | 133,667,669 |
|
| Israel - 0.5% | | | |
| Frutarom Industries Ltd. | | 365,900 | 19,361,807 |
| Kenya - 0.5% | | | |
| Safaricom Ltd. | | 94,198,200 | 18,394,828 |
| Korea (South) - 7.8% | | | |
| AMOREPACIFIC Corp. | | 90,977 | 28,555,716 |
| AMOREPACIFIC Group, Inc. | | 173,287 | 22,423,050 |
| Coway Co. Ltd. | | 291,671 | 22,849,056 |
| KT&G Corp. | | 264,182 | 26,100,490 |
| LG Household & Health Care Ltd. | | 32,766 | 23,491,150 |
| NAVER Corp. | | 51,638 | 38,691,648 |
| Samsung Electronics Co. Ltd. | | 85,821 | 122,981,424 |
|
| TOTAL KOREA (SOUTH) | | | 285,092,534 |
|
| Luxembourg - 0.5% | | | |
| Eurofins Scientific SA | | 40,160 | 18,247,046 |
| Mexico - 7.3% | | | |
| Banregio Grupo Financiero S.A.B. de CV | | 2,857,515 | 18,722,536 |
| Embotelladoras Arca S.A.B. de CV | | 2,879,500 | 17,918,988 |
| Fomento Economico Mexicano S.A.B. de CV unit | | 3,601,567 | 34,546,537 |
| Gruma S.A.B. de CV Series B | | 1,582,255 | 21,953,673 |
| Grupo Aeroportuario del Pacifico S.A.B. de CV Series B | | 2,162,557 | 20,902,468 |
| Grupo Aeroportuario del Sureste S.A.B. de CV Series B | | 1,354,740 | 21,547,827 |
| Grupo Aeroportuario Norte S.A.B. de CV | | 2,921,600 | 16,998,484 |
| Grupo Financiero Banorte S.A.B. de CV Series O | | 5,048,400 | 29,730,565 |
| Kimberly-Clark de Mexico SA de CV Series A | | 9,160,200 | 19,753,968 |
| Megacable Holdings S.A.B. de CV unit | | 4,779,152 | 17,375,976 |
| Promotora y Operadora de Infraestructura S.A.B. de CV | | 1,723,775 | 19,270,602 |
| Wal-Mart de Mexico SA de CV Series V | | 13,139,600 | 27,800,254 |
|
| TOTAL MEXICO | | | 266,521,878 |
|
| Netherlands - 0.5% | | | |
| Yandex NV Series A (b) | | 851,600 | 16,768,004 |
| Philippines - 2.7% | | | |
| Ayala Corp. | | 1,140,930 | 19,671,410 |
| Ayala Land, Inc. | | 28,335,400 | 21,209,351 |
| D&L Industries, Inc. | | 76,809,200 | 17,414,283 |
| SM Investments Corp. | | 1,422,733 | 19,741,616 |
| SM Prime Holdings, Inc. | | 36,034,800 | 20,015,406 |
|
| TOTAL PHILIPPINES | | | 98,052,066 |
|
| Russia - 2.4% | | | |
| Magnit OJSC | | 163,269 | 27,374,058 |
| NOVATEK OAO GDR (Reg. S) | | 233,000 | 24,907,700 |
| Sberbank of Russia (b) | | 16,184,100 | 37,670,906 |
|
| TOTAL RUSSIA | | | 89,952,664 |
|
| South Africa - 7.5% | | | |
| Aspen Pharmacare Holdings Ltd. | | 1,104,790 | 24,066,745 |
| Bidcorp Ltd. | | 1,277,498 | 22,525,273 |
| Capitec Bank Holdings Ltd. | | 433,511 | 22,023,179 |
| Discovery Ltd. | | 2,570,785 | 21,969,523 |
| FirstRand Ltd. | | 8,267,900 | 29,628,622 |
| Mondi Ltd. | | 944,966 | 18,466,565 |
| Naspers Ltd. Class N | | 515,712 | 86,434,230 |
| Sanlam Ltd. | | 5,160,800 | 25,016,030 |
| Shoprite Holdings Ltd. | | 1,598,400 | 23,589,995 |
|
| TOTAL SOUTH AFRICA | | | 273,720,162 |
|
| Spain - 0.5% | | | |
| Amadeus IT Holding SA Class A | | 400,400 | 18,900,181 |
| Sweden - 0.5% | | | |
| ASSA ABLOY AB (B Shares) | | 1,003,800 | 18,242,515 |
| Switzerland - 1.0% | | | |
| Nestle SA (Reg. S) | | 246,798 | 17,896,288 |
| Sika AG | | 3,880 | 18,648,153 |
|
| TOTAL SWITZERLAND | | | 36,544,441 |
|
| Taiwan - 6.0% | | | |
| Advantech Co. Ltd. | | 2,226,000 | 18,144,917 |
| ECLAT Textile Co. Ltd. | | 1,710,288 | 19,474,234 |
| Largan Precision Co. Ltd. | | 244,000 | 28,905,276 |
| Taiwan Semiconductor Manufacturing Co. Ltd. | | 25,462,000 | 152,947,098 |
|
| TOTAL TAIWAN | | | 219,471,525 |
|
| Thailand - 2.0% | | | |
| Airports of Thailand PCL (For. Reg.) | | 1,986,900 | 21,605,677 |
| Bangkok Dusit Medical Services PCL (For. Reg.) | | 26,542,400 | 17,271,972 |
| Minor International PCL (For. Reg.) | | 17,047,800 | 18,732,509 |
| Thai Beverage PCL | | 22,505,100 | 15,610,006 |
|
| TOTAL THAILAND | | | 73,220,164 |
|
| United Arab Emirates - 0.4% | | | |
| DP World Ltd. | | 897,806 | 16,115,618 |
| United Kingdom - 1.5% | | | |
| British American Tobacco PLC (United Kingdom) | | 333,300 | 19,102,406 |
| Imperial Tobacco Group PLC | | 368,332 | 17,832,912 |
| NMC Health PLC | | 1,069,600 | 19,127,272 |
|
| TOTAL UNITED KINGDOM | | | 56,062,590 |
|
| United States of America - 9.8% | | | |
| A.O. Smith Corp. | | 375,400 | 16,956,818 |
| Alphabet, Inc. Class C (b) | | 22,145 | 17,373,638 |
| Amazon.com, Inc. (b) | | 21,180 | 16,728,388 |
| American Tower Corp. | | 144,700 | 16,957,393 |
| Amphenol Corp. Class A | | 285,300 | 18,809,829 |
| China Biologic Products, Inc. (b) | | 162,678 | 19,213,899 |
| Ecolab, Inc. | | 134,800 | 15,390,116 |
| Facebook, Inc. Class A (b) | | 126,100 | 16,517,839 |
| Gartner, Inc. (b) | | 175,100 | 15,065,604 |
| International Flavors & Fragrances, Inc. | | 131,210 | 17,159,644 |
| MasterCard, Inc. Class A | | 186,500 | 19,959,230 |
| Mettler-Toledo International, Inc. (b) | | 42,880 | 17,326,950 |
| Moody's Corp. | | 159,700 | 16,053,044 |
| MSCI, Inc. | | 233,700 | 18,740,403 |
| NIKE, Inc. Class B | | 321,000 | 16,107,780 |
| Philip Morris International, Inc. | | 185,900 | 17,928,196 |
| PPG Industries, Inc. | | 177,856 | 16,563,729 |
| S&P Global, Inc. | | 141,600 | 17,253,960 |
| TransDigm Group, Inc. | | 59,200 | 16,129,632 |
| Visa, Inc. Class A | | 212,800 | 17,558,128 |
| Yum! Brands, Inc. | | 203,100 | 17,523,468 |
|
| TOTAL UNITED STATES OF AMERICA | | | 361,317,688 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $2,856,971,806) | | | 3,485,360,848 |
|
| Preferred Stocks - 4.3% | | | |
| Convertible Preferred Stocks - 0.8% | | | |
| India - 0.8% | | | |
| PC Jeweller Ltd. 13.00% (c) | | 169,426,966 | 30,541,656 |
| Nonconvertible Preferred Stocks - 3.5% | | | |
| Brazil - 3.5% | | | |
| Ambev SA sponsored ADR | | 7,111,480 | 41,957,732 |
| Itau Unibanco Holding SA | | 4,625,910 | 55,650,045 |
| Itausa-Investimentos Itau SA (PN) | | 9,957,600 | 29,448,541 |
| | | | 127,056,318 |
| TOTAL PREFERRED STOCKS | | | |
| (Cost $135,138,743) | | | 157,597,974 |
|
| Money Market Funds - 1.5% | | | |
| Fidelity Cash Central Fund, 0.41% (d) | | 24,706,161 | 24,713,573 |
| Fidelity Securities Lending Cash Central Fund 0.48% (d)(e) | | 30,708,140 | 30,714,281 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $55,425,129) | | | 55,427,854 |
| TOTAL INVESTMENT PORTFOLIO - 100.7% | | | |
| (Cost $3,047,535,678) | | | 3,698,386,676 |
| NET OTHER ASSETS (LIABILITIES) - (0.7)% | | | (25,154,365) |
| NET ASSETS - 100% | | | $3,673,232,311 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $30,541,656 or 0.8% of net assets.
(d) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| PC Jeweller Ltd. 13.00% | 7/28/16 | $25,285,041 |
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 | $164,766 |
| Fidelity Securities Lending Cash Central Fund | 1,144,943 |
| Total | $1,309,709 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $490,866,775 | $460,325,119 | $30,541,656 | $-- |
| Consumer Staples | 583,108,657 | 546,109,963 | 36,998,694 | -- |
| Energy | 51,773,129 | 51,773,129 | -- | -- |
| Financials | 620,700,938 | 564,144,933 | 56,556,005 | -- |
| Health Care | 279,490,333 | 279,490,333 | -- | -- |
| Industrials | 304,077,921 | 285,835,406 | 18,242,515 | -- |
| Information Technology | 964,048,901 | 657,075,523 | 306,973,378 | -- |
| Materials | 175,694,567 | 175,694,567 | -- | -- |
| Real Estate | 58,182,150 | 58,182,150 | -- | -- |
| Telecommunication Services | 18,394,828 | 18,394,828 | -- | -- |
| Utilities | 96,620,623 | 96,620,623 | -- | -- |
| Money Market Funds | 55,427,854 | 55,427,854 | -- | -- |
| Total Investments in Securities: | $3,698,386,676 | $3,249,074,428 | $449,312,248 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $666,460,877 |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $29,603,506) — See accompanying schedule:
Unaffiliated issuers (cost $2,992,110,549) | $3,642,958,822 | |
| Fidelity Central Funds (cost $55,425,129) | 55,427,854 | |
| Total Investments (cost $3,047,535,678) | | $3,698,386,676 |
| Foreign currency held at value (cost $1,485) | | 1,510 |
| Receivable for investments sold | | 34,882,383 |
| Receivable for fund shares sold | | 2,810,835 |
| Dividends receivable | | 3,922,032 |
| Distributions receivable from Fidelity Central Funds | | 22,585 |
| Prepaid expenses | | 9,373 |
| Other receivables | | 1,673,132 |
| Total assets | | 3,741,708,526 |
| Liabilities | | |
| Payable for investments purchased | $31,581,198 | |
| Payable for fund shares redeemed | 2,892,668 | |
| Accrued management fee | 2,158,724 | |
| Other affiliated payables | 662,788 | |
| Other payables and accrued expenses | 470,026 | |
| Collateral on securities loaned, at value | 30,710,811 | |
| Total liabilities | | 68,476,215 |
| Net Assets | | $3,673,232,311 |
| Net Assets consist of: | | |
| Paid in capital | | $3,493,934,336 |
| Undistributed net investment income | | 17,935,313 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (488,808,056) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 650,170,718 |
| Net Assets | | $3,673,232,311 |
| Emerging Markets: | | |
| Net Asset Value, offering price and redemption price per share ($3,014,956,611 ÷ 124,350,769 shares) | | $24.25 |
| Class K: | | |
| Net Asset Value, offering price and redemption price per share ($658,275,700 ÷ 27,112,609 shares) | | $24.28 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $58,880,371 |
| Interest | | 1,142 |
| Income from Fidelity Central Funds | | 1,309,709 |
| Income before foreign taxes withheld | | 60,191,222 |
| Less foreign taxes withheld | | (5,368,976) |
| Total income | | 54,822,246 |
| Expenses | | |
| Management fee | $23,732,309 | |
| Transfer agent fees | 6,364,500 | |
| Accounting and security lending fees | 1,447,441 | |
| Custodian fees and expenses | 1,446,567 | |
| Independent trustees' fees and expenses | 14,556 | |
| Registration fees | 127,913 | |
| Audit | 122,674 | |
| Legal | 10,323 | |
| Interest | 7,392 | |
| Miscellaneous | 27,525 | |
| Total expenses before reductions | 33,301,200 | |
| Expense reductions | (161,739) | 33,139,461 |
| Net investment income (loss) | | 21,682,785 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (227,255,582) | |
| Fidelity Central Funds | 6,658 | |
| Foreign currency transactions | (567,012) | |
| Total net realized gain (loss) | | (227,815,936) |
Change in net unrealized appreciation (depreciation) on:
Investment securities (net of decrease in deferred foreign taxes of $363,195) | 470,386,999 | |
| Assets and liabilities in foreign currencies | (17,830) | |
| Total change in net unrealized appreciation (depreciation) | | 470,369,169 |
| Net gain (loss) | | 242,553,233 |
| Net increase (decrease) in net assets resulting from operations | | $264,236,018 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $21,682,785 | $26,242,657 |
| Net realized gain (loss) | (227,815,936) | (231,739,571) |
| Change in net unrealized appreciation (depreciation) | 470,369,169 | (191,944,680) |
| Net increase (decrease) in net assets resulting from operations | 264,236,018 | (397,441,594) |
| Distributions to shareholders from net investment income | (17,361,594) | (18,114,621) |
| Distributions to shareholders from net realized gain | – | (2,942,055) |
| Total distributions | (17,361,594) | (21,056,676) |
| Share transactions - net increase (decrease) | 131,573,266 | 716,596,433 |
| Redemption fees | 1,810,193 | 519,430 |
| Total increase (decrease) in net assets | 380,257,883 | 298,617,593 |
| Net Assets | | |
| Beginning of period | 3,292,974,428 | 2,994,356,835 |
| End of period | $3,673,232,311 | $3,292,974,428 |
| Other Information | | |
| Undistributed net investment income end of period | $17,935,313 | $15,496,040 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Emerging Markets Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $22.55 | $25.44 | $24.43 | $22.15 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .14 | .19 | .17 | .20 | .33 |
| Net realized and unrealized gain (loss) | 1.66 | (2.91) | .86 | 2.38 | (.11) |
| Total from investment operations | 1.80 | (2.72) | 1.03 | 2.58 | .22 |
| Distributions from net investment income | (.11) | (.14) | (.02) | (.30) | (.30) |
| Distributions from net realized gain | – | (.03) | – | – | – |
| Total distributions | (.11) | (.17) | (.02) | (.30) | (.30) |
| Redemption fees added to paid in capitalA | .01 | –B | –B | –B | –B |
| Net asset value, end of period | $24.25 | $22.55 | $25.44 | $24.43 | $22.15 |
| Total ReturnC | 8.07% | (10.76)% | 4.22% | 11.78% | 1.03% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.01% | 1.05% | 1.07% | 1.08% | 1.09% |
| Expenses net of fee waivers, if any | 1.01% | 1.05% | 1.07% | 1.08% | 1.09% |
| Expenses net of all reductions | 1.00% | 1.03% | 1.07% | 1.03% | 1.03% |
| Net investment income (loss) | .61% | .78% | .71% | .85% | 1.50% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $3,014,957 | $2,738,934 | $2,370,927 | $2,241,338 | $2,203,756 |
| Portfolio turnover rateF | 79% | 107% | 94% | 119% | 176% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Emerging Markets Fund Class K
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $22.58 | $25.48 | $24.42 | $22.15 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .18 | .24 | .23 | .25 | .37 |
| Net realized and unrealized gain (loss) | 1.66 | (2.92) | .86 | 2.38 | (.10) |
| Total from investment operations | 1.84 | (2.68) | 1.09 | 2.63 | .27 |
| Distributions from net investment income | (.15) | (.20) | (.03) | (.36) | (.35) |
| Distributions from net realized gain | – | (.03) | – | – | – |
| Total distributions | (.15) | (.22)B | (.03) | (.36) | (.35) |
| Redemption fees added to paid in capitalA | .01 | –C | –C | –C | –C |
| Net asset value, end of period | $24.28 | $22.58 | $25.48 | $24.42 | $22.15 |
| Total ReturnD | 8.27% | (10.60)% | 4.47% | 12.01% | 1.25% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .84% | .85% | .86% | .87% | .87% |
| Expenses net of fee waivers, if any | .84% | .85% | .85% | .87% | .87% |
| Expenses net of all reductions | .83% | .83% | .85% | .82% | .81% |
| Net investment income (loss) | .78% | .98% | .92% | 1.07% | 1.72% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $658,276 | $554,041 | $623,430 | $547,369 | $607,919 |
| Portfolio turnover rateG | 79% | 107% | 94% | 119% | 176% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.22 per share is comprised of distributions from net investment income of $.195 and distributions from net realized gain of $.025 per share.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Emerging Markets Fund (the Fund) is a fund of Fidelity Investment 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 Emerging Markets 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. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), 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 | $704,504,212 |
| Gross unrealized depreciation | (72,114,399) |
| Net unrealized appreciation (depreciation) on securities | $632,389,813 |
| Tax Cost | $3,065,996,863 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $17,893,472 |
| Capital loss carryforward | $(470,346,872) |
| Net unrealized appreciation (depreciation) on securities and other investments | $631,751,890 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(24,838,920) |
| No expiration | |
| Short-term | (360,338,760) |
| Long-term | (85,169,192) |
| Total no expiration | (445,507,952) |
| Total capital loss carryforward | $(470,346,872) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $17,361,593 | $ 21,056,676 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,816,722,956 and $2,675,719,953, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% 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 Emerging Markets, except for Class K. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Emerging Markets | $6,093,454 | .22 |
| Class K | 271,046 | .05 |
| | $6,364,500 | |
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 $14,120 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $45,190,667 | .65% | $7,392 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $8,668 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. The value of securities loaned to FCM at period end was $193,421. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $1,144,943, including $5,055 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 $136,860 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1,342.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $23,537.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Emerging Markets | $13,660,209 | $13,346,829 |
| Class K | 3,701,385 | 4,767,792 |
| Total | $17,361,594 | $18,114,621 |
| From net realized gain | | |
| Emerging Markets | $– | $2,332,143 |
| Class K | – | 609,912 |
| Total | $– | $2,942,055 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Emerging Markets | | | | |
| Shares sold | 40,381,882 | 55,410,811 | $879,217,354 | $1,332,719,199 |
| Reinvestment of distributions | 572,542 | 546,115 | 12,670,348 | 13,577,228 |
| Shares redeemed | (38,074,038) | (27,685,404) | (819,023,837) | (631,200,476) |
| Net increase (decrease) | 2,880,386 | 28,271,522 | $72,863,865 | $715,095,951 |
| Class K | | | | |
| Shares sold | 8,389,679 | 8,915,876 | $189,089,919 | $215,741,410 |
| Reinvestment of distributions | 167,256 | 216,324 | 3,701,385 | 5,377,704 |
| Shares redeemed | (5,977,816) | (9,064,709) | (134,081,903) | (219,618,632) |
| Net increase (decrease) | 2,579,119 | 67,491 | $58,709,401 | $1,500,482 |
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.
At the end of the period, Strategic Advisers Emerging Markets Fund was the owner of record of approximately 11% of the total outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and Shareholders of Fidelity Emerging Markets Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Emerging Markets Fund (a fund of Fidelity Investment Trust) at October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Emerging Markets Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-835-5092.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Emerging Markets | .99% | | | |
| Actual | | $1,000.00 | $1,078.30 | $5.17 |
| Hypothetical-C | | $1,000.00 | $1,020.16 | $5.03 |
| Class K | .84% | | | |
| Actual | | $1,000.00 | $1,079.10 | $4.39 |
| Hypothetical-C | | $1,000.00 | $1,020.91 | $4.27 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Emerging Markets Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity Emerging Markets Fund | | | | |
| Emerging Markets | 12/12/16 | 12/09/16 | $0.140 | $0.000 |
| Class K | 12/12/16 | 12/09/16 | $0.178 | $0.000 |
|
Emerging Markets designates 9% and Class K designates 7% of the dividend distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class K and Emerging Markets designates 100% of the dividend distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity Emerging Markets Fund | | | |
| Emerging Markets | 12/07/15 | $0.1491 | $0.0391 |
| Class K | 12/07/15 | $0.1911 | $0.0391 |
|
The funds will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Emerging Markets Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.
Fidelity Emerging Markets Fund
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and considered by the Board.
Fidelity Emerging Markets Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each class ranked below the competitive median for 2015.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Corporate Headquarters
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Fidelity's Targeted International Equity Funds® Fidelity® Canada Fund
Fidelity® China Region Fund
Fidelity® Emerging Asia Fund
Fidelity® Emerging Markets Fund
Fidelity® Europe Fund
Fidelity® Japan Fund
Fidelity® Japan Smaller Companies Fund
Fidelity® Latin America Fund
Fidelity® Nordic Fund
Fidelity® Pacific Basin Fund
Annual Report October 31, 2016 |
|
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Funds nor Fidelity Distributors Corporation is a bank.
Fidelity® Canada Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Canada Fund | 7.79% | 2.23% | 2.92% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Canada Fund, a class of the fund, on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the S&P/TSX Composite Index performed over the same period.
| Period Ending Values |
| $13,340 | Fidelity® Canada Fund |
| $13,408 | S&P/TSX Composite Index |
Fidelity® Canada Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Risteard Hogan: For the one-year period ending October 31, 2016, the fund’s share classes (excluding sales charges, if applicable) posted strong gains, but lagged the 10.03% result of the fund’s benchmark S&P/TSX Composite Index by about 2 to 3 percentage points. The period was marked by persistent volatility, driven by the bottoming-out of the commodities market and the subsequent rebound, which lifted stocks of many Canadian companies with exposure to materials and oil. Stock selection drove the underperformance relative to the S&P/TSX index overall, most notably in the materials sector. The fund’s biggest individual detractor was an average underweighting in miner Barrick Gold. I did not own this stock early in the period, and the fund missed out on its rally when commodities began to rise in late January. Our modestly overweighted stake in miner Detour Gold also hurt our relative results. The stock suffered after heavy rains flooded Detour’s gold mine, causing a shortfall in production. Conversely, stock selection in consumer discretionary proved beneficial, led by the fund’s position in home improvement retailer Rona. In February, U.S.-based competitor Lowe’s made a $2 billion acquisition bid for Rona, and its stock price doubled. I subsequently sold the position to take profits.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Canada Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Canada | 93.2% |
| | United States of America* | 3.8% |
| | Bailiwick of Jersey | 0.9% |
| | United Kingdom | 0.8% |
| | France | 0.5% |
| | Ireland | 0.4% |
| | Israel | 0.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Canada | 94.1% |
| | United States of America* | 3.0% |
| | United Kingdom | 0.9% |
| | Bailiwick of Jersey | 0.8% |
| | France | 0.4% |
| | Israel | 0.3% |
| | Ireland | 0.3% |
| | Netherlands | 0.2% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 97.0 | 98.0 |
| Short-Term Investments and Net Other Assets (Liabilities) | 3.0 | 2.0 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Royal Bank of Canada (Banks) | 9.3 | 10.0 |
| The Toronto-Dominion Bank (Banks) | 8.7 | 9.2 |
| Suncor Energy, Inc. (Oil, Gas & Consumable Fuels) | 5.4 | 5.1 |
| Canadian National Railway Co. (Road & Rail) | 5.4 | 5.5 |
| Enbridge, Inc. (Oil, Gas & Consumable Fuels) | 4.1 | 3.4 |
| Rogers Communications, Inc. Class B (non-vtg.) (Wireless Telecommunication Services) | 3.7 | 3.3 |
| Sun Life Financial, Inc. (Insurance) | 3.6 | 2.9 |
| TELUS Corp. (Diversified Telecommunication Services) | 2.9 | 3.0 |
| Bank of Nova Scotia (Banks) | 2.9 | 2.3 |
| Alimentation Couche-Tard, Inc. Class B (sub. vtg.) (Food & Staples Retailing) | 2.4 | 1.8 |
| | 48.4 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Financials | 31.1 | 33.3 |
| Energy | 21.8 | 20.9 |
| Materials | 13.7 | 13.8 |
| Consumer Staples | 7.4 | 8.3 |
| Industrials | 7.4 | 7.2 |
| Telecommunication Services | 6.6 | 6.5 |
| Information Technology | 4.6 | 3.8 |
| Consumer Discretionary | 2.5 | 3.1 |
| Real Estate | 0.8 | 0.0 |
| Utilities | 0.7 | 0.4 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Canadian market. As of October 31, 2016, the Fund did not have more than 25% of its total assets invested in any one industry.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Canada Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 97.0% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 2.5% | | | |
| Auto Components - 0.1% | | | |
| Magna International, Inc. Class A (sub. vtg.) | | 57,500 | $2,360,788 |
| Media - 1.8% | | | |
| Cogeco Communications, Inc. | | 189,000 | 8,815,209 |
| Corus Entertainment, Inc. Class B (non-vtg.) | | 588,000 | 4,852,874 |
| Quebecor, Inc. Class B (sub. vtg.) | | 378,200 | 10,613,172 |
| | | | 24,281,255 |
| Specialty Retail - 0.6% | | | |
| AutoCanada, Inc. | | 255,900 | 4,206,811 |
| Sleep Country Canada Holdings, Inc. | | 177,300 | 3,768,600 |
| | | | 7,975,411 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 34,617,454 |
|
| CONSUMER STAPLES - 7.4% | | | |
| Beverages - 0.4% | | | |
| Molson Coors Brewing Co. Class B | | 50,300 | 5,221,643 |
| Food & Staples Retailing - 6.3% | | | |
| Alimentation Couche-Tard, Inc. Class B (sub. vtg.) | | 640,800 | 32,190,490 |
| Empire Co. Ltd. Class A (non-vtg.) | | 228,300 | 3,288,419 |
| George Weston Ltd. | | 296,400 | 24,153,075 |
| Jean Coutu Group, Inc. Class A (sub. vtg.) | | 395,700 | 5,959,248 |
| Metro, Inc. Class A (sub. vtg.) | | 387,395 | 11,974,500 |
| North West Co., Inc. | | 350,200 | 6,683,904 |
| | | | 84,249,636 |
| Food Products - 0.2% | | | |
| AGT Food & Ingredients, Inc. | | 103,100 | 2,931,659 |
| Tobacco - 0.5% | | | |
| Imperial Tobacco Group PLC | | 152,745 | 7,395,198 |
|
| TOTAL CONSUMER STAPLES | | | 99,798,136 |
|
| ENERGY - 21.8% | | | |
| Energy Equipment & Services - 1.1% | | | |
| Canadian Energy Services & Technology Corp. | | 1,773,500 | 6,994,569 |
| Pason Systems, Inc. | | 374,300 | 4,255,629 |
| ZCL Composites, Inc. | | 455,600 | 3,970,748 |
| | | | 15,220,946 |
| Oil, Gas & Consumable Fuels - 20.7% | | | |
| ARC Resources Ltd. (a) | | 826,300 | 14,027,325 |
| Canadian Natural Resources Ltd. | | 842,998 | 26,754,958 |
| Cenovus Energy, Inc. | | 1,629,000 | 23,500,447 |
| Enbridge, Inc. | | 1,268,800 | 54,789,306 |
| Imperial Oil Ltd. | | 560,400 | 18,174,458 |
| Keyera Corp. | | 207,404 | 6,225,367 |
| NuVista Energy Ltd. (b) | | 831,200 | 4,226,336 |
| Painted Pony Petroleum Ltd. (b) | | 740,200 | 4,536,229 |
| Parkland Fuel Corp. | | 372,600 | 8,703,167 |
| Peyto Exploration & Development Corp. | | 445,000 | 11,432,715 |
| PrairieSky Royalty Ltd. (a) | | 609,118 | 13,246,829 |
| Raging River Exploration, Inc. (b) | | 865,700 | 6,938,250 |
| Spartan Energy Corp. (b) | | 2,184,800 | 5,082,067 |
| Suncor Energy, Inc. | | 2,425,100 | 72,772,888 |
| Whitecap Resources, Inc. | | 982,700 | 7,853,980 |
| | | | 278,264,322 |
|
| TOTAL ENERGY | | | 293,485,268 |
|
| FINANCIALS - 31.1% | | | |
| Banks - 20.9% | | | |
| Bank of Nova Scotia | | 741,000 | 39,820,532 |
| Royal Bank of Canada | | 2,002,700 | 125,122,089 |
| The Toronto-Dominion Bank | | 2,571,100 | 116,660,811 |
| | | | 281,603,432 |
| Capital Markets - 1.5% | | | |
| Amundi SA | | 125,500 | 6,150,636 |
| Brookfield Asset Management, Inc. Class A | | 210,400 | 7,367,843 |
| TMX Group Ltd. | | 152,700 | 7,045,853 |
| | | | 20,564,332 |
| Diversified Financial Services - 0.5% | | | |
| Element Financial Corp. | | 778,800 | 7,588,844 |
| Insurance - 8.2% | | | |
| Fairfax Financial Holdings Ltd. (sub. vtg.) | | 28,800 | 14,749,989 |
| Intact Financial Corp. | | 317,325 | 21,571,381 |
| Power Corp. of Canada (sub. vtg.) | | 1,190,900 | 25,544,019 |
| Sun Life Financial, Inc. | | 1,442,700 | 48,283,608 |
| | | | 110,148,997 |
|
| TOTAL FINANCIALS | | | 419,905,605 |
|
| HEALTH CARE - 0.4% | | | |
| Pharmaceuticals - 0.4% | | | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | | 119,500 | 5,107,430 |
| INDUSTRIALS - 7.4% | | | |
| Airlines - 0.5% | | | |
| WestJet Airlines Ltd. | | 400,400 | 6,552,434 |
| Professional Services - 0.6% | | | |
| Stantec, Inc. | | 347,600 | 7,733,083 |
| Road & Rail - 5.9% | | | |
| Canadian National Railway Co. | | 1,148,400 | 72,193,460 |
| TransForce, Inc. | | 307,400 | 6,973,967 |
| | | | 79,167,427 |
| Trading Companies & Distributors - 0.4% | | | |
| Toromont Industries Ltd. | | 205,000 | 6,021,770 |
|
| TOTAL INDUSTRIALS | | | 99,474,714 |
|
| INFORMATION TECHNOLOGY - 4.6% | | | |
| IT Services - 1.6% | | | |
| CGI Group, Inc. Class A (sub. vtg.) (b) | | 465,800 | 22,124,892 |
| Semiconductors & Semiconductor Equipment - 0.3% | | | |
| Dialog Semiconductor PLC (b) | | 89,400 | 3,508,464 |
| Software - 2.7% | | | |
| Constellation Software, Inc. | | 41,000 | 19,207,001 |
| Open Text Corp. | | 271,814 | 16,876,664 |
| | | | 36,083,665 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 61,717,021 |
|
| MATERIALS - 13.7% | | | |
| Chemicals - 2.4% | | | |
| Agrium, Inc. | | 290,300 | 26,649,250 |
| Monsanto Co. | | 55,600 | 5,602,812 |
| | | | 32,252,062 |
| Construction Materials - 0.4% | | | |
| CRH PLC | | 174,300 | 5,658,486 |
| Containers & Packaging - 0.9% | | | |
| CCL Industries, Inc. Class B | | 68,500 | 12,182,204 |
| Metals & Mining - 9.4% | | | |
| Agnico Eagle Mines Ltd. (Canada) | | 439,700 | 22,330,846 |
| Barrick Gold Corp. | | 364,200 | 6,408,052 |
| Detour Gold Corp. (b) | | 548,000 | 10,446,850 |
| Franco-Nevada Corp. | | 299,000 | 19,569,977 |
| Labrador Iron Ore Royalty Corp. (a) | | 569,900 | 6,241,580 |
| Lundin Mining Corp. (b) | | 2,315,100 | 9,061,563 |
| Randgold Resources Ltd. | | 139,064 | 12,349,798 |
| Silver Wheaton Corp. | | 730,200 | 17,594,918 |
| Tahoe Resources, Inc. | | 825,200 | 9,892,803 |
| Teck Resources Ltd. Class B (sub. vtg.) | | 311,800 | 6,732,072 |
| Torex Gold Resources, Inc. (b) | | 321,470 | 5,979,778 |
| | | | 126,608,237 |
| Paper & Forest Products - 0.6% | | | |
| Western Forest Products, Inc. | | 5,001,100 | 7,606,236 |
|
| TOTAL MATERIALS | | | 184,307,225 |
|
| REAL ESTATE - 0.8% | | | |
| Equity Real Estate Investment Trusts (REITs) - 0.8% | | | |
| Allied Properties (REIT) | | 396,700 | 10,665,028 |
| TELECOMMUNICATION SERVICES - 6.6% | | | |
| Diversified Telecommunication Services - 2.9% | | | |
| TELUS Corp. | | 1,233,900 | 39,952,492 |
| Wireless Telecommunication Services - 3.7% | | | |
| Rogers Communications, Inc. Class B (non-vtg.) | | 1,237,000 | 49,764,050 |
|
| TOTAL TELECOMMUNICATION SERVICES | | | 89,716,542 |
|
| UTILITIES - 0.7% | | | |
| Electric Utilities - 0.7% | | | |
| Hydro One Ltd. | | 502,700 | 9,171,005 |
| TOTAL COMMON STOCKS | | | |
| (Cost $1,060,078,806) | | | 1,307,965,428 |
|
| Money Market Funds - 4.0% | | | |
| Fidelity Cash Central Fund, 0.41% (c) | | 36,919,274 | 36,930,350 |
| Fidelity Securities Lending Cash Central Fund 0.48% (c)(d) | | 16,423,546 | 16,426,831 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $53,348,323) | | | 53,357,181 |
| TOTAL INVESTMENT PORTFOLIO - 101.0% | | | |
| (Cost $1,113,427,129) | | | 1,361,322,609 |
| NET OTHER ASSETS (LIABILITIES) - (1.0)% | | | (13,283,481) |
| NET ASSETS - 100% | | | $1,348,039,128 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $113,081 |
| Fidelity Securities Lending Cash Central Fund | 1,440,259 |
| Total | $1,553,340 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $34,617,454 | $34,617,454 | $-- | $-- |
| Consumer Staples | 99,798,136 | 99,798,136 | -- | -- |
| Energy | 293,485,268 | 293,485,268 | -- | -- |
| Financials | 419,905,605 | 419,905,605 | -- | -- |
| Health Care | 5,107,430 | 5,107,430 | -- | -- |
| Industrials | 99,474,714 | 99,474,714 | -- | -- |
| Information Technology | 61,717,021 | 61,717,021 | -- | -- |
| Materials | 184,307,225 | 166,298,941 | 18,008,284 | -- |
| Real Estate | 10,665,028 | 10,665,028 | -- | -- |
| Telecommunication Services | 89,716,542 | 89,716,542 | -- | -- |
| Utilities | 9,171,005 | 9,171,005 | -- | -- |
| Money Market Funds | 53,357,181 | 53,357,181 | -- | -- |
| Total Investments in Securities: | $1,361,322,609 | $1,343,314,325 | $18,008,284 | $-- |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Canada Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $15,496,692) — See accompanying schedule:
Unaffiliated issuers (cost $1,060,078,806) | $1,307,965,428 | |
| Fidelity Central Funds (cost $53,348,323) | 53,357,181 | |
| Total Investments (cost $1,113,427,129) | | $1,361,322,609 |
| Foreign currency held at value (cost $322,027) | | 322,012 |
| Receivable for investments sold | | 5,446,147 |
| Receivable for fund shares sold | | 517,222 |
| Dividends receivable | | 2,275,466 |
| Distributions receivable from Fidelity Central Funds | | 194,865 |
| Prepaid expenses | | 3,620 |
| Other receivables | | 22,731 |
| Total assets | | 1,370,104,672 |
| Liabilities | | |
| Payable for investments purchased | $1,904,493 | |
| Payable for fund shares redeemed | 2,403,488 | |
| Accrued management fee | 933,753 | |
| Distribution and service plan fees payable | 29,658 | |
| Other affiliated payables | 301,766 | |
| Other payables and accrued expenses | 66,456 | |
| Collateral on securities loaned, at value | 16,425,930 | |
| Total liabilities | | 22,065,544 |
| Net Assets | | $1,348,039,128 |
| Net Assets consist of: | | |
| Paid in capital | | $1,132,107,522 |
| Undistributed net investment income | | 13,430,443 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (45,390,587) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 247,891,750 |
| Net Assets | | $1,348,039,128 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($44,143,668 ÷ 917,909 shares) | | $48.09 |
| Maximum offering price per share (100/94.25 of $48.09) | | $51.02 |
| Class T: | | |
| Net Asset Value and redemption price per share ($11,139,837 ÷ 232,955 shares) | | $47.82 |
| Maximum offering price per share (100/96.50 of $47.82) | | $49.55 |
| Class C: | | |
| Net Asset Value and offering price per share ($18,488,751 ÷ 394,450 shares)(a) | | $46.87 |
| Canada: | | |
| Net Asset Value, offering price and redemption price per share ($1,233,050,086 ÷ 25,500,126 shares) | | $48.35 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($41,216,786 ÷ 853,627 shares) | | $48.28 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $36,030,694 |
| Income from Fidelity Central Funds | | 1,553,340 |
| Income before foreign taxes withheld | | 37,584,034 |
| Less foreign taxes withheld | | (5,201,439) |
| Total income | | 32,382,595 |
| Expenses | | |
| Management fee | | |
| Basic fee | $8,884,225 | |
| Performance adjustment | 2,391,451 | |
| Transfer agent fees | 2,923,404 | |
| Distribution and service plan fees | 374,493 | |
| Accounting and security lending fees | 586,540 | |
| Custodian fees and expenses | 24,761 | |
| Independent trustees' fees and expenses | 5,552 | |
| Registration fees | 82,165 | |
| Audit | 77,777 | |
| Legal | 6,773 | |
| Miscellaneous | 12,106 | |
| Total expenses before reductions | 15,369,247 | |
| Expense reductions | (62,846) | 15,306,401 |
| Net investment income (loss) | | 17,076,194 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (33,075,291) | |
| Fidelity Central Funds | 1,430 | |
| Other affiliated issuers | 813,420 | |
| Foreign currency transactions | (327,888) | |
| Total net realized gain (loss) | | (32,588,329) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 98,517,932 | |
| Assets and liabilities in foreign currencies | 12,526 | |
| Total change in net unrealized appreciation (depreciation) | | 98,530,458 |
| Net gain (loss) | | 65,942,129 |
| Net increase (decrease) in net assets resulting from operations | | $83,018,323 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $17,076,194 | $20,629,341 |
| Net realized gain (loss) | (32,588,329) | (6,996,196) |
| Change in net unrealized appreciation (depreciation) | 98,530,458 | (283,157,405) |
| Net increase (decrease) in net assets resulting from operations | 83,018,323 | (269,524,260) |
| Distributions to shareholders from net investment income | (17,462,078) | (24,029,674) |
| Distributions to shareholders from net realized gain | (1,771,774) | (262,730,704) |
| Total distributions | (19,233,852) | (286,760,378) |
| Share transactions - net increase (decrease) | (105,554,211) | (304,156,881) |
| Redemption fees | 81,286 | 128,345 |
| Total increase (decrease) in net assets | (41,688,454) | (860,313,174) |
| Net Assets | | |
| Beginning of period | 1,389,727,582 | 2,250,040,756 |
| End of period | $1,348,039,128 | $1,389,727,582 |
| Other Information | | |
| Undistributed net investment income end of period | $13,430,443 | $14,473,984 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $45.25 | $60.56 | $57.31 | $53.65 | $52.20 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .48 | .45 | .47 | .60 | .57 |
| Net realized and unrealized gain (loss) | 2.84 | (8.04) | 3.13 | 3.63 | 1.50 |
| Total from investment operations | 3.32 | (7.59) | 3.60 | 4.23 | 2.07 |
| Distributions from net investment income | (.42) | (.50) | (.03) | (.57) | (.33) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.48) | (7.72) | (.35) | (.57) | (.62) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.09 | $45.25 | $60.56 | $57.31 | $53.65 |
| Total ReturnC,D | 7.45% | (14.32)% | 6.32% | 7.98% | 4.04% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.48% | 1.43% | 1.29% | 1.19% | 1.08% |
| Expenses net of fee waivers, if any | 1.48% | 1.43% | 1.29% | 1.19% | 1.08% |
| Expenses net of all reductions | 1.48% | 1.43% | 1.29% | 1.18% | 1.08% |
| Net investment income (loss) | 1.06% | .90% | .79% | 1.11% | 1.11% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $44,144 | $58,286 | $95,004 | $116,661 | $159,597 |
| Portfolio turnover rateG | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $44.99 | $60.22 | $57.14 | $53.48 | $52.01 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .35 | .29 | .29 | .45 | .43 |
| Net realized and unrealized gain (loss) | 2.83 | (8.00) | 3.11 | 3.63 | 1.49 |
| Total from investment operations | 3.18 | (7.71) | 3.40 | 4.08 | 1.92 |
| Distributions from net investment income | (.29) | (.30) | – | (.42) | (.16) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.35) | (7.52) | (.32) | (.42) | (.45) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $47.82 | $44.99 | $60.22 | $57.14 | $53.48 |
| Total ReturnC,D | 7.14% | (14.58)% | 5.99% | 7.69% | 3.74% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.77% | 1.75% | 1.59% | 1.47% | 1.36% |
| Expenses net of fee waivers, if any | 1.77% | 1.75% | 1.59% | 1.47% | 1.36% |
| Expenses net of all reductions | 1.77% | 1.75% | 1.59% | 1.46% | 1.36% |
| Net investment income (loss) | .78% | .58% | .48% | .83% | .83% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $11,140 | $12,820 | $21,989 | $23,751 | $29,626 |
| Portfolio turnover rateG | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $44.02 | $59.04 | $56.27 | $52.61 | $51.19 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .15 | .07 | .02 | .20 | .19 |
| Net realized and unrealized gain (loss) | 2.78 | (7.85) | 3.07 | 3.58 | 1.46 |
| Total from investment operations | 2.93 | (7.78) | 3.09 | 3.78 | 1.65 |
| Distributions from net investment income | (.02) | (.02) | – | (.12) | – |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.23) |
| Total distributions | (.08) | (7.24) | (.32) | (.12) | (.23) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $46.87 | $44.02 | $59.04 | $56.27 | $52.61 |
| Total ReturnC,D | 6.67% | (14.96)% | 5.53% | 7.21% | 3.26% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 2.21% | 2.19% | 2.03% | 1.93% | 1.82% |
| Expenses net of fee waivers, if any | 2.21% | 2.19% | 2.03% | 1.92% | 1.82% |
| Expenses net of all reductions | 2.21% | 2.18% | 2.03% | 1.92% | 1.82% |
| Net investment income (loss) | .33% | .14% | .04% | .37% | .37% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $18,489 | $21,610 | $38,749 | $46,040 | $66,500 |
| Portfolio turnover rateG | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $45.55 | $60.95 | $57.72 | $54.05 | $52.59 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .62 | .60 | .66 | .77 | .73 |
| Net realized and unrealized gain (loss) | 2.85 | (8.09) | 3.13 | 3.66 | 1.51 |
| Total from investment operations | 3.47 | (7.49) | 3.79 | 4.43 | 2.24 |
| Distributions from net investment income | (.61) | (.69) | (.24) | (.76) | (.49) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.67) | (7.91) | (.56) | (.76) | (.78) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.35 | $45.55 | $60.95 | $57.72 | $54.05 |
| Total ReturnC | 7.79% | (14.08)% | 6.64% | 8.32% | 4.36% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.17% | 1.15% | .98% | .87% | .77% |
| Expenses net of fee waivers, if any | 1.17% | 1.15% | .98% | .87% | .77% |
| Expenses net of all reductions | 1.17% | 1.14% | .98% | .86% | .77% |
| Net investment income (loss) | 1.37% | 1.18% | 1.09% | 1.42% | 1.42% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,233,050 | $1,279,488 | $2,057,843 | $2,262,380 | $2,992,597 |
| Portfolio turnover rateF | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Canada Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $45.44 | $60.80 | $57.57 | $53.91 | $52.44 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .66 | .61 | .65 | .78 | .74 |
| Net realized and unrealized gain (loss) | 2.83 | (8.07) | 3.12 | 3.64 | 1.50 |
| Total from investment operations | 3.49 | (7.46) | 3.77 | 4.42 | 2.24 |
| Distributions from net investment income | (.59) | (.68) | (.22) | (.76) | (.48) |
| Distributions from net realized gain | (.06) | (7.22) | (.32) | – | (.29) |
| Total distributions | (.65) | (7.90) | (.54) | (.76) | (.77) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.28 | $45.44 | $60.80 | $57.57 | $53.91 |
| Total ReturnC | 7.83% | (14.05)% | 6.62% | 8.34% | 4.38% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.14% | 1.13% | 1.00% | .86% | .76% |
| Expenses net of fee waivers, if any | 1.13% | 1.12% | 1.00% | .86% | .76% |
| Expenses net of all reductions | 1.13% | 1.12% | 1.00% | .85% | .76% |
| Net investment income (loss) | 1.41% | 1.21% | 1.08% | 1.43% | 1.42% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $41,217 | $14,846 | $30,165 | $30,831 | $59,245 |
| Portfolio turnover rateF | 44% | 24% | 85% | 64% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Canada Fund (the Fund) is a fund of Fidelity Investment 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, Canada and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, capital loss carryforwards, deferred trustees compensation 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 | $305,552,511 |
| Gross unrealized depreciation | (70,218,263) |
| Net unrealized appreciation (depreciation) on securities | $235,334,248 |
| Tax Cost | $1,125,988,361 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $18,548,465 |
| Capital loss carryforward | $(37,937,420) |
| Net unrealized appreciation (depreciation) on securities and other investments | $235,320,823 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(3,213,379) |
| Long-term | (34,724,041) |
| Total capital loss carryforward | $(37,937,420) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $17,462,078 | $ 24,029,674 |
| Long-term Capital Gains | 1,771,775 | 262,730,704 |
| Total | $19,233,853 | $ 286,760,378 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $548,563,418 and $674,318,641, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Canada as compared to its benchmark index, the S&P/TSX Composite Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .88% 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
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $115,855 | $– |
| Class T | .25% | .25% | 55,454 | – |
| Class B | .75% | .25% | 14,092 | 10,569 |
| Class C | .75% | .25% | 189,092 | 9,902 |
| | | | $374,493 | $20,471 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $6,909 |
| Class T | 2,394 |
| Class B(a) | 1,499 |
| Class C(a) | 1,244 |
| | $12,046 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $133,275 | .29 |
| Class T | 35,874 | .32 |
| Class B | 3,959 | .28 |
| Class C | 50,278 | .27 |
| Canada | 2,660,970 | .23 |
| Class I | 39,048 | .19 |
| | $2,923,404 | |
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 $418 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $3,256 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $1,440,259, including $2,028 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 $53,977 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund level operating expenses in the amount of $8,869.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $482,934 | $783,478 |
| Class T | 79,315 | 106,245 |
| Class C | 8,502 | 12,920 |
| Canada | 16,735,044 | 22,800,214 |
| Class I | 156,283 | 326,817 |
| Total | $17,462,078 | $24,029,674 |
| From net realized gain | | |
| Class A | $69,321 | $11,358,847 |
| Class T | 16,639 | 2,548,483 |
| Class B | 3,460 | 742,098 |
| Class C | 28,339 | 4,664,328 |
| Canada | 1,638,014 | 239,967,215 |
| Class I | 16,001 | 3,449,733 |
| Total | $1,771,774 | $262,730,704 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 134,113 | 153,407 | $6,147,050 | $8,099,168 |
| Reinvestment of distributions | 11,425 | 200,582 | 496,287 | 10,552,616 |
| Shares redeemed | (515,795) | (634,705) | (23,017,589) | (31,737,294) |
| Net increase (decrease) | (370,257) | (280,716) | $(16,374,252) | $(13,085,510) |
| Class T | | | | |
| Shares sold | 23,059 | 21,812 | $1,036,279 | $1,102,045 |
| Reinvestment of distributions | 2,169 | 49,518 | 93,951 | 2,597,730 |
| Shares redeemed | (77,250) | (151,491) | (3,322,138) | (7,597,599) |
| Net increase (decrease) | (52,022) | (80,161) | $(2,191,908) | $(3,897,824) |
| Class B | | | | |
| Shares sold | 499 | 1,663 | $21,798 | $85,823 |
| Reinvestment of distributions | 68 | 12,380 | 2,895 | 641,184 |
| Shares redeemed | (61,115) | (59,611) | (2,725,253) | (2,906,257) |
| Net increase (decrease) | (60,548) | (45,568) | $(2,700,560) | $(2,179,250) |
| Class C | | | | |
| Shares sold | 41,578 | 42,631 | $1,834,681 | $2,146,853 |
| Reinvestment of distributions | 731 | 75,003 | 31,141 | 3,864,885 |
| Shares redeemed | (138,754) | (283,087) | (5,980,751) | (13,692,762) |
| Net increase (decrease) | (96,445) | (165,453) | $(4,114,929) | $(7,681,024) |
| Canada | | | | |
| Shares sold | 3,590,664 | 1,250,697 | $166,771,731 | $63,450,179 |
| Reinvestment of distributions | 388,588 | 4,716,591 | 16,926,879 | 249,177,482 |
| Shares redeemed | (6,566,019) | (11,643,757) | (289,731,847) | (581,614,067) |
| Net increase (decrease) | (2,586,767) | (5,676,469) | $(106,033,237) | $(268,986,406) |
| Class I | | | | |
| Shares sold | 807,708 | 66,679 | $37,813,282 | $3,430,310 |
| Reinvestment of distributions | 2,849 | 49,883 | 123,890 | 2,628,352 |
| Shares redeemed | (283,652) | (285,976) | (12,076,497) | (14,385,529) |
| Net increase (decrease) | 526,905 | (169,414) | $25,860,675 | $(8,326,867) |
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.
Fidelity® China Region Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® China Region Fund | 0.15% | 7.45% | 7.61% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® China Region Fund, a class of the fund, on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI Golden Dragon Index performed over the same period.
| Period Ending Values |
| $20,816 | Fidelity® China Region Fund |
| $18,685 | MSCI Golden Dragon Index |
Fidelity® China Region Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Robert Bao: For the year, the fund’s share classes generated flattish returns (excluding sales charges, if applicable), considerably lagging the 7.31% return of the benchmark MSCI Golden Dragon Index. Versus the benchmark, stock selection and sector selection both hurt, with most of the negative impact coming from the consumer discretionary, industrials and materials sectors. Geographically, picks in China detracted, as did overweighting China and underweighting Taiwan. The largest individual detractor was China Shanshui Cement Group, an out-of-benchmark stock that lost the vast majority of its value. Also weighing on relative results was Taiwan Semiconductor Manufacturing, which hurt because first we didn’t own it and later underweighted it for much of the period. Two non-benchmark positions – in Hong Kong-listed casino operator Summit Ascent Holdings and online travel company Tuniu, headquartered in China – further hampered results. Conversely, stock selection in consumer staples was a modest positive, along with positioning in utilities. A zero-weighting in the weak-performing shares of China-based online search firm Baidu made this benchmark stock our top relative contributor. Also bolstering results were non-benchmark names Kweichow Moutai, a liquor supplier based in China, and West China Cement. We liquidated the vast majority of this latter position to lock in profits after rival Anhui Conch Cement offered to double its stake in the company.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® China Region Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Cayman Islands | 30.6% |
| | China | 29.0% |
| | Taiwan | 20.3% |
| | United States of America* | 6.1% |
| | United Kingdom | 4.8% |
| | Bermuda | 3.0% |
| | Hong Kong | 2.7% |
| | Netherlands | 2.1% |
| | British Virgin Islands | 1.1% |
| | Other | 0.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | China | 37.1% |
| | Cayman Islands | 26.7% |
| | Taiwan | 18.9% |
| | Hong Kong | 6.2% |
| | United Kingdom | 3.5% |
| | Bermuda | 3.3% |
| | Netherlands | 2.8% |
| | British Virgin Islands | 1.1% |
| | United States of America* | 0.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 93.9 | 99.6 |
| Short-Term Investments and Net Other Assets (Liabilities) | 6.1 | 0.4 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Tencent Holdings Ltd. (Internet Software & Services) | 9.2 | 7.9 |
| Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors & Semiconductor Equipment) | 8.8 | 7.6 |
| Alibaba Group Holding Ltd. sponsored ADR (Internet Software & Services) | 5.8 | 2.7 |
| China Construction Bank Corp. (H Shares) (Banks) | 2.8 | 2.6 |
| Ping An Insurance (Group) Co. of China Ltd. (H Shares) (Insurance) | 2.5 | 2.7 |
| Hon Hai Precision Industry Co. Ltd. (Foxconn) (Electronic Equipment & Components) | 2.1 | 1.0 |
| Kweichow Moutai Co. Ltd. (A Shares) (Beverages) | 2.0 | 2.4 |
| Industrial & Commercial Bank of China Ltd. (H Shares) (Banks) | 1.9 | 2.3 |
| China Pacific Insurance (Group) Co. Ltd. (H Shares) (Insurance) | 1.7 | 2.0 |
| BBMG Corp. (H Shares) (Construction Materials) | 1.7 | 2.1 |
| | 38.5 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 36.2 | 27.8 |
| Financials | 17.0 | 22.1 |
| Consumer Discretionary | 12.6 | 19.8 |
| Industrials | 5.1 | 9.8 |
| Materials | 4.0 | 5.6 |
| Energy | 3.9 | 0.1 |
| Real Estate | 3.6 | 0.0 |
| Consumer Staples | 3.5 | 4.1 |
| Utilities | 3.3 | 2.9 |
| Health Care | 3.2 | 3.3 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Hong Kong, Taiwanese and Chinese markets. As of October 31, 2016, the Fund did not have more than 25% of its total assets invested in any one industry.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® China Region Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 93.2% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 11.9% | | | |
| Automobiles - 1.6% | | | |
| Chongqing Changan Automobile Co. Ltd. (B Shares) | | 9,000,741 | $13,752,575 |
| Guangzhou Automobile Group Co. Ltd. (H Shares) | | 2,324,000 | 2,810,777 |
| | | | 16,563,352 |
| Diversified Consumer Services - 1.8% | | | |
| New Oriental Education & Technology Group, Inc. sponsored ADR | | 297,200 | 14,898,636 |
| TAL Education Group ADR (a)(b) | | 51,000 | 4,153,440 |
| | | | 19,052,076 |
| Hotels, Restaurants & Leisure - 1.9% | | | |
| China CYTS Tours Holding Co. Ltd. | | 887,536 | 2,982,555 |
| China International Travel Service Corp. Ltd. (A Shares) | | 753,281 | 5,008,310 |
| Huangshan Tourism Development Co. Ltd. | | 7,381,914 | 10,105,840 |
| Shanghai Jin Jiang International Hotel Co. Ltd. (H Shares) | | 8,996,000 | 2,633,072 |
| | | | 20,729,777 |
| Household Durables - 3.2% | | | |
| Haier Electronics Group Co. Ltd. | | 675,000 | 1,089,671 |
| Nien Made Enterprise Co. Ltd. | | 800,000 | 9,286,836 |
| Qingdao Haier Co. Ltd. | | 3,099,822 | 4,565,693 |
| Sundart Holdings Ltd. | | 20,000,000 | 11,346,713 |
| Techtronic Industries Co. Ltd. | | 2,081,000 | 7,835,060 |
| | | | 34,123,973 |
| Internet & Direct Marketing Retail - 2.0% | | | |
| Ctrip.com International Ltd. ADR (b) | | 259,700 | 11,465,755 |
| JD.com, Inc. sponsored ADR (b) | | 390,500 | 10,133,475 |
| | | | 21,599,230 |
| Textiles, Apparel & Luxury Goods - 1.4% | | | |
| JNBY Design Ltd. | | 6,510,000 | 5,766,670 |
| Lao Feng Xiang Co. Ltd. (B Shares) | | 1,368,188 | 4,665,521 |
| Toung Loong Textile Manufacturing Co. Ltd. | | 1,618,300 | 4,439,886 |
| | | | 14,872,077 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 126,940,485 |
|
| CONSUMER STAPLES - 3.5% | | | |
| Beverages - 2.0% | | | |
| Kweichow Moutai Co. Ltd. (A Shares) | | 446,346 | 20,944,495 |
| Food Products - 1.5% | | | |
| China Modern Dairy Holdings Ltd. (a)(b) | | 34,000,000 | 7,408,888 |
| Unified-President Enterprises Corp. | | 4,611,000 | 8,935,791 |
| | | | 16,344,679 |
|
| TOTAL CONSUMER STAPLES | | | 37,289,174 |
|
| ENERGY - 3.9% | | | |
| Energy Equipment & Services - 0.8% | | | |
| China Oilfield Services Ltd. (H Shares) | | 8,126,000 | 7,858,243 |
| Oil, Gas & Consumable Fuels - 3.1% | | | |
| China Coal Energy Co. Ltd. (H Shares) (b) | | 11,180,000 | 6,342,813 |
| China Shenhua Energy Co. Ltd. (H Shares) | | 3,560,500 | 7,409,722 |
| CNOOC Ltd. | | 6,753,000 | 8,497,126 |
| PetroChina Co. Ltd. (H Shares) | | 16,080,000 | 11,002,503 |
| | | | 33,252,164 |
|
| TOTAL ENERGY | | | 41,110,407 |
|
| FINANCIALS - 17.0% | | | |
| Banks - 6.8% | | | |
| China Construction Bank Corp. (H Shares) | | 40,879,000 | 29,938,911 |
| Hangzhou Hikvision Digital Technology Co. Ltd. ELS (A Shares) (BNP Paribas Warrant Program) warrants 11/27/17 (b)(c) | | 3,196,700 | 11,577,529 |
| Industrial & Commercial Bank of China Ltd. (H Shares) | | 33,821,000 | 20,300,707 |
| Midea Group Co. Ltd. ELS (A Shares) (BNP Paribas Arbitrage Warrant Program) warrants 2/10/17 (b)(c) | | 2,559,400 | 10,255,278 |
| | | | 72,072,425 |
| Capital Markets - 6.0% | | | |
| Beijing Yanjing Brewery (UBS Warrant Programme) ELS warrants 10/6/17 (b)(c) | | 6,405,173 | 7,203,196 |
| CITIC Securities Co. Ltd. (H Shares) | | 1,156,000 | 2,563,738 |
| Hangzhou Robam Appliances Co. Ltd. ELS (A Shares) (UBS Warrant Programme) warrants 1/15/18 (b)(c) | | 1,330,500 | 7,430,284 |
| Jiangsu Yanghe Brewery Joint-Stock Co. Ltd. ELS (UBS Warrant Programme) warrants 10/23/17 (b)(c) | | 1,147,262 | 11,792,969 |
| Lens Technology Co., Ltd. ELS (UBS Warrant Programme) warrants 9/25/17 (b)(c) | | 2,192,811 | 8,226,520 |
| Tai Fook Securities Group Ltd. | | 16,516,000 | 10,605,267 |
| Wuliangye Yibin Co. Ltd. ELS (A Shares): | | | |
| (Deutsche Bank Warrant Program) warrants 3/20/17 (b)(c) | | 1,013,394 | 5,231,636 |
| (UBS Warrant Programme) warrants 3/7/19 (b)(c) | | 1,071,282 | 5,530,483 |
| Yunnan Baiyao Group Co. Ltd. ELS (A Shares) (UBS Warrant Programme) warrants 2/17/17 (b)(c) | | 559,455 | 5,716,088 |
| | | | 64,300,181 |
| Insurance - 4.2% | | | |
| China Pacific Insurance (Group) Co. Ltd. (H Shares) | | 5,143,600 | 18,603,191 |
| Ping An Insurance (Group) Co. of China Ltd. (H Shares) | | 4,994,500 | 26,371,408 |
| | | | 44,974,599 |
|
| TOTAL FINANCIALS | | | 181,347,205 |
|
| HEALTH CARE - 3.2% | | | |
| Biotechnology - 0.0% | | | |
| Samsung Biologics Co. Ltd. (b) | | 1,711 | 203,449 |
| Health Care Providers & Services - 1.1% | | | |
| Phoenix Healthcare Group Ltd. | | 6,945,000 | 11,050,319 |
| Life Sciences Tools & Services - 0.8% | | | |
| JHL Biotech, Inc. (b) | | 3,976,696 | 8,608,386 |
| Pharmaceuticals - 1.3% | | | |
| China Resources Pharmaceutical Group Ltd. | | 4,500,000 | 5,233,671 |
| Livzon Pharmaceutical Group, Inc. | | 1,492,800 | 8,709,788 |
| | | | 13,943,459 |
|
| TOTAL HEALTH CARE | | | 33,805,613 |
|
| INDUSTRIALS - 5.1% | | | |
| Air Freight & Logistics - 0.0% | | | |
| Sinotrans Air Transportation Development Co. Ltd. (A Shares) | | 30 | 85 |
| Construction & Engineering - 1.7% | | | |
| Beijing Urban Consolidated & Development Group Ltd. (H Shares) | | 20,963,000 | 14,487,906 |
| China Energy Engineering Corp. Ltd. | | 27,132,000 | 3,743,286 |
| | | | 18,231,192 |
| Electrical Equipment - 1.4% | | | |
| Harbin Electric Machinery Co. Ltd.(H Shares) | | 21,974,000 | 10,738,305 |
| Jiangnan Group Ltd. | | 25,552,000 | 4,217,181 |
| | | | 14,955,486 |
| Machinery - 0.2% | | | |
| EVA Precision Industrial Holdings Ltd. | | 15,240,000 | 1,670,288 |
| Road & Rail - 0.8% | | | |
| Daqin Railway Co. Ltd. (A Shares) | | 7,999,997 | 8,004,956 |
| Trading Companies & Distributors - 1.0% | | | |
| Summit Ascent Holdings Ltd. (a)(b) | | 35,866,000 | 10,960,205 |
|
| TOTAL INDUSTRIALS | | | 53,822,212 |
|
| INFORMATION TECHNOLOGY - 36.2% | | | |
| Electronic Equipment & Components - 5.1% | | | |
| Chroma ATE, Inc. | | 4,073,000 | 10,347,695 |
| Hon Hai Precision Industry Co. Ltd. (Foxconn) | | 8,366,400 | 22,635,201 |
| Largan Precision Co. Ltd. | | 85,000 | 10,069,461 |
| Sunny Optical Technology Group Co. Ltd. | | 1,076,000 | 5,258,222 |
| Tongda Group Holdings Ltd. | | 20,390,000 | 5,389,624 |
| | | | 53,700,203 |
| Internet Software & Services - 17.6% | | | |
| 58.com, Inc. ADR (b) | | 75,000 | 3,138,750 |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 606,200 | 61,644,478 |
| NetEase, Inc. ADR | | 68,300 | 17,552,417 |
| SINA Corp. (b) | | 99,700 | 7,192,358 |
| Tencent Holdings Ltd. | | 3,680,900 | 97,552,451 |
| Weibo Corp. sponsored ADR (a)(b) | | 9,970 | 458,720 |
| | | | 187,539,174 |
| Semiconductors & Semiconductor Equipment - 11.5% | | | |
| Advanced Semiconductor Engineering, Inc. | | 13,995,000 | 16,458,964 |
| Himax Technologies, Inc. sponsored ADR (a) | | 400,000 | 3,140,000 |
| Taiwan Semiconductor Manufacturing Co. Ltd. | | 15,496,000 | 93,082,563 |
| Vanguard International Semiconductor Corp. | | 4,668,000 | 9,534,840 |
| | | | 122,216,367 |
| Software - 0.9% | | | |
| China City Railway Transportation Technology Holdings Co. Ltd. (b) | | 48,540,000 | 10,013,990 |
| Technology Hardware, Storage & Peripherals - 1.1% | | | |
| ADLINK Technology, Inc. | | 3,682,844 | 7,148,772 |
| Axiomtek Co. Ltd. | | 2,000,000 | 3,552,342 |
| HTC Corp. (b) | | 358,000 | 1,049,184 |
| | | | 11,750,298 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 385,220,032 |
|
| MATERIALS - 4.0% | | | |
| Construction Materials - 2.9% | | | |
| BBMG Corp. (H Shares) | | 49,643,000 | 18,178,739 |
| China Shanshui Cement Group Ltd. (a)(b) | | 20,656,000 | 2,660,720 |
| TCC International Holdings Ltd. | | 28,948,000 | 7,353,129 |
| West China Cement Ltd. (b) | | 26,992,000 | 2,749,474 |
| | | | 30,942,062 |
| Metals & Mining - 1.1% | | | |
| Angang Steel Co. Ltd. (H Shares) (b) | | 10,712,000 | 5,497,194 |
| Jiangxi Copper Co. Ltd. (H Shares) | | 4,214,000 | 4,977,112 |
| Zijin Mining Group Co. Ltd. (H Shares) | | 3,106,000 | 977,189 |
| | | | 11,451,495 |
|
| TOTAL MATERIALS | | | 42,393,557 |
|
| REAL ESTATE - 3.6% | | | |
| Real Estate Management & Development - 3.6% | | | |
| Beijing Capital Land Ltd. (H Shares) | | 35,170,000 | 13,513,755 |
| Cheung Kong Property Holdings Ltd. | | 2,338,500 | 17,322,669 |
| Longfor Properties Co. Ltd. | | 789,500 | 1,048,520 |
| Sun Hung Kai Properties Ltd. | | 456,000 | 6,808,647 |
| | | | 38,693,591 |
| TELECOMMUNICATION SERVICES - 1.5% | | | |
| Diversified Telecommunication Services - 1.5% | | | |
| China Telecom Corp. Ltd. (H Shares) | | 7,408,000 | 3,830,300 |
| Chunghwa Telecom Co. Ltd. | | 3,109,000 | 10,655,518 |
| CITIC 1616 Holdings Ltd. | | 3,220,000 | 1,104,396 |
| | | | 15,590,214 |
| UTILITIES - 3.3% | | | |
| Independent Power and Renewable Electricity Producers - 2.4% | | | |
| Beijing Jingneng Clean Energy Co. Ltd. (H Shares) | | 22,166,000 | 6,745,074 |
| Canvest Environmental Protection Group Co. Ltd. | | 16,700,000 | 7,536,538 |
| Huaneng Renewables Corp. Ltd. (H Shares) | | 31,944,000 | 10,750,216 |
| | | | 25,031,828 |
| Water Utilities - 0.9% | | | |
| Beijing Enterprises Water Group Ltd. | | 13,838,000 | 10,045,444 |
|
| TOTAL UTILITIES | | | 35,077,272 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $899,926,189) | | | 991,289,762 |
|
| Convertible Preferred Stocks - 0.7% | | | |
| CONSUMER DISCRETIONARY - 0.7% | | | |
| Internet & Direct Marketing Retail - 0.7% | | | |
| China Internet Plus Holdings Ltd. Series A-11 (d) | | | |
| (Cost $6,268,244) | | 1,983,088 | 7,656,108 |
|
| Money Market Funds - 3.4% | | | |
| Fidelity Cash Central Fund, 0.41% (e) | | 24,629,687 | 24,637,076 |
| Fidelity Securities Lending Cash Central Fund 0.48% (e)(f) | | 11,655,545 | 11,657,876 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $36,292,626) | | | 36,294,952 |
| TOTAL INVESTMENT PORTFOLIO - 97.3% | | | |
| (Cost $942,487,059) | | | 1,035,240,822 |
| NET OTHER ASSETS (LIABILITIES) - 2.7% | | | 28,877,647 |
| NET ASSETS - 100% | | | $1,064,118,469 |
Security Type Abbreviations
ELS – Equity-Linked Security
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $72,963,983 or 6.9% of net assets.
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $7,656,108 or 0.7% of net assets.
(e) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(f) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| China Internet Plus Holdings Ltd. Series A-11 | 1/26/15 | $6,268,244 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $73,885 |
| Fidelity Securities Lending Cash Central Fund | 1,295,017 |
| Total | $1,368,902 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $134,596,593 | $126,940,485 | $-- | $7,656,108 |
| Consumer Staples | 37,289,174 | 37,289,174 | -- | -- |
| Energy | 41,110,407 | 21,610,778 | 19,499,629 | -- |
| Financials | 181,347,205 | 88,082,515 | 87,548,602 | 5,716,088 |
| Health Care | 33,805,613 | 33,602,164 | 203,449 | -- |
| Industrials | 53,822,212 | 53,822,212 | -- | -- |
| Information Technology | 385,220,032 | 178,126,054 | 207,093,978 | -- |
| Materials | 42,393,557 | 39,732,837 | -- | 2,660,720 |
| Real Estate | 38,693,591 | 38,693,591 | -- | -- |
| Telecommunication Services | 15,590,214 | 4,934,696 | 10,655,518 | -- |
| Utilities | 35,077,272 | 35,077,272 | -- | -- |
| Money Market Funds | 36,294,952 | 36,294,952 | -- | -- |
| Total Investments in Securities: | $1,035,240,822 | $694,206,730 | $325,001,176 | $16,032,916 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $440,166,850 |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:
| Investments in Securities: | |
| Equities - Consumer Discretionary | |
| Beginning Balance | $12,373,756 |
| Net Realized Gain (Loss) on Investment Securities | -- |
| Net Unrealized Gain (Loss) on Investment Securities | 1,388 |
| Cost of Purchases | -- |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | (4,719,036) |
| Ending Balance | $7,656,108 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $1,388 |
| Equities - Health Care | |
| Beginning Balance | $14,369,442 |
| Net Realized Gain (Loss) on Investment Securities | (2,338,033) |
| Net Unrealized Gain (Loss) on Investment Securities | 2,825,119 |
| Cost of Purchases | -- |
| Proceeds of Sales | (6,769,445) |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | (8,087,083) |
| Ending Balance | $-- |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $-- |
| Equities - Industrials | |
| Beginning Balance | $15,897,809 |
| Net Realized Gain (Loss) on Investment Securities | 3,170,175 |
| Net Unrealized Gain (Loss) on Investment Securities | (6,277,111) |
| Cost of Purchases | 3,344,006 |
| Proceeds of Sales | (16,134,879) |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $-- |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $-- |
| Equities - Materials | |
| Beginning Balance | $14,440,021 |
| Net Realized Gain (Loss) on Investment Securities | -- |
| Net Unrealized Gain (Loss) on Investment Securities | (11,779,301) |
| Cost of Purchases | -- |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $2,660,720 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $(11,779,301) |
| Other Investments in Securities | |
| Beginning Balance | $-- |
| Net Realized Gain (Loss) on Investment Securities | 45,691 |
| Net Unrealized Gain (Loss) on Investment Securities | (670,536) |
| Cost of Purchases | 6,340,933 |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers into Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $5,716,088 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at October 31, 2016 | $(670,536) |
The information used in the above reconciliations represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliations are included in Net Gain (Loss) on the Fund's Statement of Operations.
See accompanying notes which are an integral part of the financial statements.
Fidelity® China Region Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $10,804,361) — See accompanying schedule:
Unaffiliated issuers (cost $906,194,433) | $998,945,870 | |
| Fidelity Central Funds (cost $36,292,626) | 36,294,952 | |
| Total Investments (cost $942,487,059) | | $1,035,240,822 |
| Foreign currency held at value (cost $148,734) | | 149,002 |
| Receivable for investments sold | | 43,143,103 |
| Receivable for fund shares sold | | 573,167 |
| Dividends receivable | | 78,210 |
| Distributions receivable from Fidelity Central Funds | | 72,094 |
| Prepaid expenses | | 2,750 |
| Other receivables | | 26,218 |
| Total assets | | 1,079,285,366 |
| Liabilities | | |
| Payable for investments purchased | $1,081,005 | |
| Payable for fund shares redeemed | 1,391,162 | |
| Accrued management fee | 636,535 | |
| Distribution and service plan fees payable | 16,956 | |
| Other affiliated payables | 234,584 | |
| Other payables and accrued expenses | 151,435 | |
| Collateral on securities loaned, at value | 11,655,220 | |
| Total liabilities | | 15,166,897 |
| Net Assets | | $1,064,118,469 |
| Net Assets consist of: | | |
| Paid in capital | | $1,178,148,346 |
| Undistributed net investment income | | 10,634,162 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (217,422,863) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 92,758,824 |
| Net Assets | | $1,064,118,469 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($22,937,001 ÷ 901,030 shares) | | $25.46 |
| Maximum offering price per share (100/94.25 of $25.46) | | $27.01 |
| Class T: | | |
| Net Asset Value and redemption price per share ($5,644,336 ÷ 222,703 shares) | | $25.34 |
| Maximum offering price per share (100/96.50 of $25.34) | | $26.26 |
| Class C: | | |
| Net Asset Value and offering price per share ($11,218,488 ÷ 451,957 shares)(a) | | $24.82 |
| China Region: | | |
| Net Asset Value, offering price and redemption price per share ($1,004,984,818 ÷ 38,985,951 shares) | | $25.78 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($19,333,826 ÷ 754,563 shares) | | $25.62 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $23,845,641 |
| Income from Fidelity Central Funds (including $1,295,017 from security lending) | | 1,368,902 |
| Income before foreign taxes withheld | | 25,214,543 |
| Less foreign taxes withheld | | (2,524,867) |
| Total income | | 22,689,676 |
| Expenses | | |
| Management fee | $7,676,892 | |
| Transfer agent fees | 2,422,825 | |
| Distribution and service plan fees | 210,154 | |
| Accounting and security lending fees | 518,036 | |
| Custodian fees and expenses | 379,053 | |
| Independent trustees' fees and expenses | 4,852 | |
| Registration fees | 93,824 | |
| Audit | 101,787 | |
| Legal | 3,898 | |
| Interest | 2,278 | |
| Miscellaneous | 10,939 | |
| Total expenses before reductions | 11,424,538 | |
| Expense reductions | (93,623) | 11,330,915 |
| Net investment income (loss) | | 11,358,761 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (213,648,715) | |
| Fidelity Central Funds | 9,478 | |
| Foreign currency transactions | 192,332 | |
| Total net realized gain (loss) | | (213,446,905) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 180,727,946 | |
| Assets and liabilities in foreign currencies | 5,159 | |
| Total change in net unrealized appreciation (depreciation) | | 180,733,105 |
| Net gain (loss) | | (32,713,800) |
| Net increase (decrease) in net assets resulting from operations | | $(21,355,039) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $11,358,761 | $23,670,929 |
| Net realized gain (loss) | (213,446,905) | 235,474,014 |
| Change in net unrealized appreciation (depreciation) | 180,733,105 | (344,541,210) |
| Net increase (decrease) in net assets resulting from operations | (21,355,039) | (85,396,267) |
| Distributions to shareholders from net investment income | (15,103,497) | (13,114,934) |
| Distributions to shareholders from net realized gain | (159,831,115) | (172,413,722) |
| Total distributions | (174,934,612) | (185,528,656) |
| Share transactions - net increase (decrease) | (83,319,865) | 200,238,928 |
| Redemption fees | 164,633 | 2,391,591 |
| Total increase (decrease) in net assets | (279,444,883) | (68,294,404) |
| Net Assets | | |
| Beginning of period | 1,343,563,352 | 1,411,857,756 |
| End of period | $1,064,118,469 | $1,343,563,352 |
| Other Information | | |
| Undistributed net investment income end of period | $10,634,162 | $15,009,760 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.34 | $34.18 | $35.56 | $28.53 | $27.28 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .18 | .40B | .21 | .30 | .36 |
| Net realized and unrealized gain (loss) | (.20) | (.83) | 2.01C | 7.06 | 1.42 |
| Total from investment operations | (.02) | (.43) | 2.22 | 7.36 | 1.78 |
| Distributions from net investment income | (.27) | (.22) | (.30) | (.34) | (.19) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.86) | (4.46) | (3.61) | (.34) | (.53) |
| Redemption fees added to paid in capitalA | –D | .05 | .01 | .01 | –D |
| Net asset value, end of period | $25.46 | $29.34 | $34.18 | $35.56 | $28.53 |
| Total ReturnE,F | (.13)% | (1.45)% | 6.45%C | 26.07% | 6.70% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.33% | 1.28% | 1.35% | 1.35% | 1.36% |
| Expenses net of fee waivers, if any | 1.33% | 1.28% | 1.35% | 1.35% | 1.36% |
| Expenses net of all reductions | 1.32% | 1.26% | 1.35% | 1.31% | 1.29% |
| Net investment income (loss) | .75% | 1.26%B | .64% | .94% | 1.35% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $22,937 | $32,761 | $21,728 | $20,623 | $13,539 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .85%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.42%.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.18 | $34.02 | $35.40 | $28.40 | $27.13 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .10 | .30B | .12 | .21 | .29 |
| Net realized and unrealized gain (loss) | (.22) | (.83) | 1.99C | 7.04 | 1.40 |
| Total from investment operations | (.12) | (.53) | 2.11 | 7.25 | 1.69 |
| Distributions from net investment income | (.13) | (.12) | (.19) | (.26) | (.08) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.72) | (4.36) | (3.50) | (.26) | (.42) |
| Redemption fees added to paid in capitalA | –D | .05 | .01 | .01 | –D |
| Net asset value, end of period | $25.34 | $29.18 | $34.02 | $35.40 | $28.40 |
| Total ReturnE,F | (.50)% | (1.79)% | 6.15%C | 25.74% | 6.38% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.67% | 1.62% | 1.65% | 1.64% | 1.64% |
| Expenses net of fee waivers, if any | 1.67% | 1.62% | 1.65% | 1.64% | 1.64% |
| Expenses net of all reductions | 1.67% | 1.60% | 1.65% | 1.60% | 1.57% |
| Net investment income (loss) | .40% | .92%B | .35% | .65% | 1.06% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $5,644 | $6,409 | $6,305 | $5,965 | $4,349 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .51%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.12%.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $28.68 | $33.56 | $34.99 | $28.07 | $26.86 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | –B | .15C | (.02) | .06 | .16 |
| Net realized and unrealized gain (loss) | (.21) | (.80) | 1.97D | 6.97 | 1.39 |
| Total from investment operations | (.21) | (.65) | 1.95 | 7.03 | 1.55 |
| Distributions from net investment income | (.06) | (.04) | (.08) | (.12) | – |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.65) | (4.28) | (3.39) | (.12) | (.34) |
| Redemption fees added to paid in capitalA | –B | .05 | .01 | .01 | –B |
| Net asset value, end of period | $24.82 | $28.68 | $33.56 | $34.99 | $28.07 |
| Total ReturnE,F | (.88)% | (2.21)% | 5.71%D | 25.14% | 5.88% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 2.07% | 2.05% | 2.07% | 2.10% | 2.11% |
| Expenses net of fee waivers, if any | 2.07% | 2.05% | 2.07% | 2.10% | 2.11% |
| Expenses net of all reductions | 2.06% | 2.02% | 2.07% | 2.07% | 2.04% |
| Net investment income (loss) | .01% | .49%C | (.07)% | .19% | .59% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $11,218 | $14,355 | $10,445 | $6,957 | $4,515 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .09%.
D Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 5.68%.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.66 | $34.51 | $35.83 | $28.73 | $27.49 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .26 | .51B | .33 | .41 | .45 |
| Net realized and unrealized gain (loss) | (.21) | (.84) | 2.03C | 7.11 | 1.42 |
| Total from investment operations | .05 | (.33) | 2.36 | 7.52 | 1.87 |
| Distributions from net investment income | (.35) | (.33) | (.38) | (.43) | (.29) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.93)D | (4.57) | (3.69) | (.43) | (.63) |
| Redemption fees added to paid in capitalA | –E | .05 | .01 | .01 | –E |
| Net asset value, end of period | $25.78 | $29.66 | $34.51 | $35.83 | $28.73 |
| Total ReturnF | .15% | (1.14)% | 6.83%C | 26.51% | 7.01% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.02% | .99% | 1.01% | 1.02% | 1.04% |
| Expenses net of fee waivers, if any | 1.02% | .98% | 1.01% | 1.02% | 1.04% |
| Expenses net of all reductions | 1.01% | .96% | 1.01% | .98% | .98% |
| Net investment income (loss) | 1.06% | 1.55%B | .99% | 1.27% | 1.66% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,004,985 | $1,262,274 | $1,352,761 | $1,425,828 | $1,265,488 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.15%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.80%.
D Total distributions of $3.93 per share is comprised of distributions from net investment income of $.345 and distributions from net realized gain of $3.588 per share.
E Amount represents less than $.005 per share.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity China Region Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $29.51 | $34.39 | $35.75 | $28.68 | $27.46 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .26 | .51B | .34 | .42 | .45 |
| Net realized and unrealized gain (loss) | (.20) | (.84) | 2.02C | 7.10 | 1.42 |
| Total from investment operations | .06 | (.33) | 2.36 | 7.52 | 1.87 |
| Distributions from net investment income | (.36) | (.36) | (.43) | (.46) | (.31) |
| Distributions from net realized gain | (3.59) | (4.24) | (3.31) | – | (.34) |
| Total distributions | (3.95) | (4.60) | (3.73)D | (.46) | (.65) |
| Redemption fees added to paid in capitalA | –E | .05 | .01 | .01 | –E |
| Net asset value, end of period | $25.62 | $29.51 | $34.39 | $35.75 | $28.68 |
| Total ReturnF | .16% | (1.14)% | 6.87%C | 26.58% | 7.02% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.00% | .97% | .98% | .97% | 1.04% |
| Expenses net of fee waivers, if any | 1.00% | .97% | .98% | .97% | 1.04% |
| Expenses net of all reductions | .99% | .95% | .98% | .93% | .98% |
| Net investment income (loss) | 1.07% | 1.57%B | 1.01% | 1.32% | 1.66% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $19,334 | $26,961 | $19,404 | $10,206 | $1,958 |
| Portfolio turnover rateI | 70% | 151% | 87% | 92% | 107% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.16%.
C Amount includes a reimbursement from the adviser for an operations error which amounted to $.01 per share. Excluding this reimbursement, the total return would have been 6.84%.
D Total distributions of $3.73 per share is comprised of distributions from net investment income of $.425 and distributions from net realized gain of $3.306 per share.
E Amount represents less than $.005 per share.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity China Region Fund (the Fund) is a fund of Fidelity Investment 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, China Region and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy. Equity securities, including restricted securities, for which observable inputs are not available are valued using alternate valuation approaches, including the market approach and the income approach and are categorized as Level 3 in the hierarchy. The market approach generally consists of using comparable market transactions while the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
The following provides information on Level 3 securities held by the Fund that were valued at period end based on unobservable inputs. These amounts exclude valuations provided by a broker.
| Asset Type | Fair Value at 10/31/16 | Valuation Technique (s) | Unobservable Input | Amount or Range / Weighted Average | Impact to Valuation from an Increase in Input(a) |
| Equities | $16,032,916 | Book value | Book value multiple | 1.0 | Increase |
| | | Market approach | Transaction price | $3.86 | Increase |
| | | | Discount rate | 10.0% | Decrease |
| | | | Last trade | $69.23 | Increase |
(a) Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, as well as a roll forward of Level 3 investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), 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 | $147,085,482 |
| Gross unrealized depreciation | (60,210,376) |
| Net unrealized appreciation (depreciation) on securities | $86,875,106 |
| Tax Cost | $948,365,716 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $12,545,547 |
| Capital loss carryforward | $(213,455,585) |
| Net unrealized appreciation (depreciation) on securities and other investments | $86,880,167 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(180,168,755) |
| Long-term | (33,286,830) |
| Total capital loss carryforward | $(213,455,585) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $15,103,497 | $ 14,374,708 |
| Long-term Capital Gains | 159,831,115 | 171,153,948 |
| Total | $174,934,612 | $ 185,528,656 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $759,144,025 and $1,054,572,219, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| | Distribution
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $61,169 | $2,147 |
| Class T | .25% | .25% | 27,456 | 251 |
| Class B | .75% | .25% | 3,869 | 2,902 |
| Class C | .75% | .25% | 117,660 | 37,575 |
| | | | $210,154 | $42,875 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $42,111 |
| Class T | 2,909 |
| Class B(a) | 282 |
| Class C(a) | 7,725 |
| | $53,027 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $67,457 | .28 |
| Class T | 20,574 | .37 |
| Class B | 1,105 | .29 |
| Class C | 31,284 | .27 |
| China Region | 2,264,470 | .22 |
| Class I | 37,935 | .20 |
| | $2,422,825 | |
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 $3,430 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $5,885,000 | .59% | $2,033 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,779 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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, and includes $12,193 from securities loaned to FCM.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $2,532,250. The weighted average interest rate was .87%. The interest expense amounted to $245 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $84,489 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $9,134.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $297,014 | $147,088 |
| Class T | 28,522 | 22,529 |
| Class C | 29,301 | 12,652 |
| China Region | 14,431,516 | 12,728,622 |
| Class I | 317,144 | 204,043 |
| Total | $15,103,497 | $13,114,934 |
| From net realized gain | | |
| Class A | $3,946,989 | $2,783,517 |
| Class T | 763,704 | 789,251 |
| Class B | 93,006 | 149,794 |
| Class C | 1,752,229 | 1,276,956 |
| China Region | 150,087,760 | 165,004,911 |
| Class I | 3,187,427 | 2,409,293 |
| Total | $159,831,115 | $172,413,722 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 240,368 | 1,058,546 | $5,824,186 | $35,978,665 |
| Reinvestment of distributions | 162,605 | 93,297 | 4,157,811 | 2,812,898 |
| Shares redeemed | (618,365) | (671,056) | (14,282,494) | (22,101,227) |
| Net increase (decrease) | (215,392) | 480,787 | $(4,300,497) | $16,690,336 |
| Class T | | | | |
| Shares sold | 43,307 | 151,664 | $1,037,492 | $5,390,399 |
| Reinvestment of distributions | 30,599 | 26,640 | 781,504 | 801,072 |
| Shares redeemed | (70,825) | (143,989) | (1,686,295) | (4,554,275) |
| Net increase (decrease) | 3,081 | 34,315 | $132,701 | $1,637,196 |
| Class B | | | | |
| Shares sold | 30 | 2,771 | $648 | $95,500 |
| Reinvestment of distributions | 3,443 | 4,834 | 87,630 | 144,877 |
| Shares redeemed | (31,204) | (15,827) | (704,876) | (523,534) |
| Net increase (decrease) | (27,731) | (8,222) | $(616,598) | $(283,157) |
| Class C | | | | |
| Shares sold | 98,283 | 412,366 | $2,387,271 | $14,420,908 |
| Reinvestment of distributions | 55,713 | 38,139 | 1,398,404 | 1,131,586 |
| Shares redeemed | (202,505) | (261,252) | (4,847,372) | (7,778,046) |
| Net increase (decrease) | (48,509) | 189,253 | $(1,061,697) | $7,774,448 |
| China Region | | | | |
| Shares sold | 3,781,033 | 18,091,274 | $92,584,217 | $635,141,274 |
| Reinvestment of distributions | 6,142,435 | 5,608,420 | 158,659,097 | 170,439,887 |
| Shares redeemed | (13,494,506) | (20,336,385) | (325,219,240) | (642,334,138) |
| Net increase (decrease) | (3,571,038) | 3,363,309 | $(73,975,926) | $163,247,023 |
| Class I | | | | |
| Shares sold | 405,852 | 1,017,162 | $10,200,502 | $33,130,120 |
| Reinvestment of distributions | 99,936 | 58,945 | 2,565,348 | 1,781,897 |
| Shares redeemed | (664,751) | (726,796) | (16,263,698) | (23,738,935) |
| Net increase (decrease) | (158,963) | 349,311 | $(3,497,848) | $11,173,082 |
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Fidelity® Emerging Asia Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Emerging Asia Fund | 7.42% | 5.41% | 5.37% |
Prior to December 1, 2010, the fund operated under certain different investment policies and compared its performance to a different index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Emerging Asia Fund on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI AC (All Country) Asia ex Japan Index performed over the same period.
| Period Ending Values |
| $16,869 | Fidelity® Emerging Asia Fund |
| $17,180 | MSCI AC (All Country) Asia ex Japan Index |
Fidelity® Emerging Asia Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Colin Chickles, who managed the fund for most of the period: For the year, the fund returned 7.42%, outperforming the 6.59% return of the benchmark MSCI AC (All Country) Asia ex Japan Index. Versus the benchmark, stock selection lifted performance, especially in consumer staples, information technology and energy. Geographically, our picks in India added the most value. A zero-weighting in the weak-performing shares of China-based online search firm Baidu made this benchmark stock our top contributor. We correctly forecast that the firm’s revenue from medical ads would weaken. Other contributors included a large overweighting in India’s Yes Bank – which we eliminated prior to period end – and out-of-benchmark positions in India-headquartered energy firm Petronet LNG and Kweichow Moutai, a China-based maker of the distilled spirit baijiu. Conversely, stock picks in materials weighed on relative performance. Taiwan and China were detractors from a regional perspective. One benchmark name that hurt relative results because we didn’t own it was Telekomunikasi Indonesia, a state-owned telecom services provider. Also weighing on relative performance was a non-benchmark stake in PAX Global Technology, a Hong Kong-listed, China-based provider of electronic point-of-sale devices, as well as an overweighting in Taiwanese diversified financial firm Fubon Financial Holding.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Note to shareholders: Effective September 29, 2016, John Dance became Lead Portfolio Manager, joining Colin Chickles, who is retiring at the end of 2016.
Fidelity® Emerging Asia Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Cayman Islands | 15.5% |
| | Taiwan | 15.0% |
| | India | 14.6% |
| | Hong Kong | 11.6% |
| | Korea (South) | 11.3% |
| | China | 9.9% |
| | United States of America* | 5.6% |
| | Indonesia | 3.8% |
| | Bermuda | 3.8% |
| | Other | 8.9% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Korea (South) | 18.3% |
| | Cayman Islands | 15.1% |
| | China | 13.8% |
| | Taiwan | 13.6% |
| | Hong Kong | 12.4% |
| | India | 9.8% |
| | Singapore | 3.8% |
| | Bermuda | 2.8% |
| | Thailand | 2.3% |
| | Other* | 8.1% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 95.3 | 99.0 |
| Bonds | 0.1 | 0.0 |
| Short-Term Investments and Net Other Assets (Liabilities) | 4.6 | 1.0 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan, Semiconductors & Semiconductor Equipment) | 5.4 | 4.5 |
| Tencent Holdings Ltd. (Cayman Islands, Internet Software & Services) | 5.3 | 4.1 |
| Samsung Electronics Co. Ltd. (Korea (South), Technology Hardware, Storage & Peripherals) | 5.1 | 5.0 |
| Alibaba Group Holding Ltd. sponsored ADR (Cayman Islands, Internet Software & Services) | 3.9 | 2.0 |
| AIA Group Ltd. (Hong Kong, Insurance) | 2.7 | 2.8 |
| China Mobile Ltd. (Hong Kong, Wireless Telecommunication Services) | 2.5 | 1.4 |
| China Construction Bank Corp. (H Shares) (China, Banks) | 2.1 | 2.5 |
| Hon Hai Precision Industry Co. Ltd. (Foxconn) (Taiwan, Electronic Equipment & Components) | 1.9 | 1.8 |
| Housing Development Finance Corp. Ltd. (India, Thrifts & Mortgage Finance) | 1.4 | 0.0 |
| Reliance Industries Ltd. (India, Oil, Gas & Consumable Fuels) | 1.3 | 1.3 |
| | 31.6 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 26.2 | 23.0 |
| Financials | 17.6 | 31.7 |
| Consumer Discretionary | 9.4 | 9.1 |
| Consumer Staples | 6.8 | 5.5 |
| Telecommunication Services | 5.9 | 6.0 |
| Utilities | 5.9 | 5.4 |
| Industrials | 5.4 | 5.9 |
| Real Estate | 5.0 | 0.0 |
| Energy | 5.0 | 5.3 |
| Health Care | 4.8 | 1.9 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Emerging Asia Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 95.3% | | | |
| | | Shares | Value |
| Australia - 0.3% | | | |
| Beacon Lighting Group Ltd. | | 438,521 | $565,423 |
| Woodside Petroleum Ltd. | | 102,898 | 2,220,648 |
|
| TOTAL AUSTRALIA | | | 2,786,071 |
|
| Bermuda - 3.8% | | | |
| Brilliance China Automotive Holdings Ltd. | | 2,752,000 | 3,268,101 |
| Cheung Kong Infrastructure Holdings Ltd. | | 1,077,000 | 8,825,080 |
| Hongkong Land Holdings Ltd. | | 1,058,500 | 7,091,950 |
| Man Wah Holdings Ltd. | | 6,192,800 | 4,112,271 |
| PAX Global Technology Ltd. (a) | | 2,390,000 | 1,494,607 |
| Skyworth Digital Holdings Ltd. | | 5,769,200 | 3,734,279 |
| Tai Cheung Holdings Ltd. | | 1,023,000 | 871,896 |
| Vtech Holdings Ltd. | | 447,800 | 5,496,781 |
|
| TOTAL BERMUDA | | | 34,894,965 |
|
| Cayman Islands - 15.5% | | | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 351,600 | 35,754,204 |
| Cheung Kong Property Holdings Ltd. | | 1,382,500 | 10,241,005 |
| China State Construction International Holdings Ltd. | | 3,758,000 | 5,494,868 |
| ChinaCache International Holdings Ltd. sponsored ADR (a)(b) | | 55,418 | 186,204 |
| Ctrip.com International Ltd. ADR (b) | | 184,900 | 8,163,335 |
| Haitian International Holdings Ltd. | | 1,573,000 | 3,245,160 |
| International Housewares Retail Co. Ltd. | | 9,610,000 | 1,920,625 |
| JD.com, Inc. sponsored ADR (b) | | 253,300 | 6,573,135 |
| Lee & Man Paper Manufacturing Ltd. | | 3,196,000 | 2,402,496 |
| Lee's Pharmaceutical Holdings Ltd. | | 966,366 | 838,579 |
| Longfor Properties Co. Ltd. | | 4,225,000 | 5,611,143 |
| MGM China Holdings Ltd. | | 3,386,000 | 5,605,823 |
| SITC International Holdings Co. Ltd. | | 5,435,000 | 3,216,619 |
| TCC International Holdings Ltd. | | 2,680,000 | 680,751 |
| Tencent Holdings Ltd. | | 1,847,400 | 48,960,417 |
| Xingda International Holdings Ltd. | | 6,786,000 | 2,817,456 |
| Xinyi Glass Holdings Ltd. | | 1,748,000 | 1,503,331 |
|
| TOTAL CAYMAN ISLANDS | | | 143,215,151 |
|
| China - 9.9% | | | |
| Aluminum Corp. of China Ltd. (H Shares) (b) | | 6,398,000 | 2,375,878 |
| BBMG Corp. (H Shares) | | 17,937,000 | 6,568,339 |
| Beijing Jingneng Clean Energy Co. Ltd. (H Shares) | | 3,018,000 | 918,372 |
| Beijing Urban Consolidated & Development Group Ltd. (H Shares) | | 1,574,000 | 1,087,820 |
| China Construction Bank Corp. (H Shares) | | 26,559,000 | 19,451,247 |
| China Pacific Insurance (Group) Co. Ltd. (H Shares) | | 2,466,800 | 8,921,835 |
| China Telecom Corp. Ltd. (H Shares) | | 17,468,000 | 9,031,813 |
| Huaneng Renewables Corp. Ltd. (H Shares) | | 18,080,000 | 6,084,520 |
| Huangshan Tourism Development Co. Ltd. | | 427,380 | 585,083 |
| Jiangsu Hengrui Medicine Co. Ltd. (A Shares) | | 1,557,251 | 10,604,144 |
| Kweichow Moutai Co. Ltd. (A Shares) | | 184,748 | 8,669,180 |
| PICC Property & Casualty Co. Ltd. (H Shares) | | 4,901,120 | 7,937,292 |
| Shenzhen Expressway Co. (H Shares) | | 3,484,000 | 3,499,476 |
| Tong Ren Tang Technologies Co. Ltd. (H Shares) | | 548,000 | 1,000,533 |
| Weifu High-Technology Co. Ltd. (B Shares) | | 196,800 | 464,877 |
| Zhengzhou Yutong Bus Co. Ltd. | | 1,428,118 | 4,542,038 |
|
| TOTAL CHINA | | | 91,742,447 |
|
| Hong Kong - 11.6% | | | |
| AIA Group Ltd. | | 3,894,800 | 24,582,455 |
| China Mobile Ltd. | | 2,012,400 | 23,054,848 |
| China Resources Beer Holdings Co. Ltd. | | 2,412,666 | 5,132,968 |
| CNOOC Ltd. sponsored ADR (a) | | 65,800 | 8,256,584 |
| CSPC Pharmaceutical Group Ltd. | | 5,144,000 | 5,332,666 |
| Dah Sing Banking Group Ltd. | | 758,800 | 1,373,668 |
| Dah Sing Financial Holdings Ltd. | | 130,800 | 888,804 |
| HKT Trust/HKT Ltd. unit | | 6,458,300 | 8,876,930 |
| Hysan Development Co. Ltd. | | 1,258,000 | 5,806,990 |
| Magnificent Hotel Investment Ltd. | | 6,930,000 | 162,627 |
| Power Assets Holdings Ltd. | | 1,213,000 | 11,409,681 |
| Sino Land Ltd. | | 2,404,000 | 4,091,625 |
| Techtronic Industries Co. Ltd. | | 2,019,500 | 7,603,510 |
|
| TOTAL HONG KONG | | | 106,573,356 |
|
| India - 14.5% | | | |
| Adani Ports & Special Economic Zone | | 729,813 | 3,358,835 |
| Apollo Tyres Ltd. (b) | | 792,696 | 2,399,284 |
| Asian Paints Ltd. | | 444,938 | 7,136,436 |
| Axis Bank Ltd. | | 573,139 | 4,183,487 |
| Bajaj Corp. Ltd. | | 364,264 | 2,221,720 |
| Bharat Petroleum Corp. Ltd. | | 447,639 | 4,489,781 |
| Bharti Infratel Ltd. | | 882,984 | 4,575,390 |
| CCL Products (India) Ltd. (b) | | 122,021 | 457,313 |
| Coal India Ltd. | | 548,355 | 2,670,032 |
| Exide Industries Ltd. (b) | | 172,930 | 507,470 |
| Havells India Ltd. | | 891,782 | 5,442,501 |
| HCL Technologies Ltd. | | 321,191 | 3,674,616 |
| HDFC Bank Ltd. | | 286,780 | 6,408,394 |
| Housing Development Finance Corp. Ltd. | | 641,207 | 13,377,734 |
| Indian Oil Corp. Ltd. | | 1,164,272 | 5,646,345 |
| Indraprastha Gas Ltd. (b) | | 402,064 | 5,183,610 |
| Page Industries Ltd. | | 17,150 | 4,230,035 |
| Petronet LNG Ltd. | | 1,379,595 | 8,041,120 |
| Power Finance Corp. Ltd. | | 1,976,469 | 3,677,058 |
| Power Grid Corp. of India Ltd. | | 1,356,066 | 3,575,900 |
| Redington India Ltd. | | 533,540 | 840,237 |
| Reliance Industries Ltd. | | 747,167 | 11,816,483 |
| Rural Electrification Corp. Ltd. | | 1,355,776 | 2,741,818 |
| Sun Pharmaceutical Industries Ltd. | | 955,617 | 10,649,890 |
| Tata Motors Ltd. (b) | | 990,372 | 7,972,808 |
| Torrent Pharmaceuticals Ltd. | | 164,827 | 3,497,037 |
| UPL Ltd. (b) | | 296,415 | 3,100,772 |
| Vakrangee Ltd. (b) | | 259,461 | 980,776 |
| VST Industries Ltd. (b) | | 31,444 | 1,118,433 |
|
| TOTAL INDIA | | | 133,975,315 |
|
| Indonesia - 3.8% | | | |
| PT Adaro Energy Tbk | | 14,982,200 | 1,819,956 |
| PT Bank Central Asia Tbk | | 8,490,000 | 10,101,721 |
| PT Bank Rakyat Indonesia Tbk | | 9,459,300 | 8,844,533 |
| PT Gudang Garam Tbk | | 1,744,500 | 9,078,138 |
| PT Indofood Sukses Makmur Tbk | | 7,887,900 | 5,138,500 |
|
| TOTAL INDONESIA | | | 34,982,848 |
|
| Israel - 0.4% | | | |
| Sarine Technologies Ltd. | | 3,165,100 | 3,708,257 |
| Japan - 1.1% | | | |
| KDDI Corp. | | 182,000 | 5,531,558 |
| Olympus Corp. | | 137,200 | 4,906,074 |
|
| TOTAL JAPAN | | | 10,437,632 |
|
| Korea (South) - 11.3% | | | |
| AMOREPACIFIC Group, Inc. | | 33,709 | 4,361,889 |
| BGFretail Co. Ltd. | | 38,110 | 5,797,693 |
| Hyundai Fire & Marine Insurance Co. Ltd. | | 138,187 | 4,270,941 |
| Hyundai Motor Co. | | 71,457 | 8,746,611 |
| KEPCO Plant Service & Engineering Co. Ltd. | | 82,890 | 3,978,703 |
| Kiwoom Securities Co. Ltd. | | 38,110 | 2,215,785 |
| Korea Electric Power Corp. | | 176,260 | 7,628,424 |
| Korea Petro Chemical Industries Co. Ltd. | | 9,528 | 1,703,578 |
| Korea Zinc Co. Ltd. | | 10,137 | 4,032,625 |
| LG Household & Health Care Ltd. | | 7,601 | 5,449,436 |
| LS Industrial Systems Ltd. | | 70,383 | 2,409,165 |
| Medy-Tox, Inc. | | 10,272 | 3,653,448 |
| Samsung Biologics Co. Ltd. (b) | | 1,475 | 175,387 |
| Samsung Electronics Co. Ltd. | | 32,862 | 47,091,220 |
| SK Telecom Co. Ltd. | | 14,549 | 2,853,302 |
|
| TOTAL KOREA (SOUTH) | | | 104,368,207 |
|
| Malaysia - 1.3% | | | |
| AEON Credit Service Bhd | | 136,100 | 478,215 |
| Bursa Malaysia Bhd | | 408,400 | 842,112 |
| Cahya Mata Sarawak Bhd | | 973,500 | 891,118 |
| Glomac Bhd | | 305,200 | 56,020 |
| Tenaga Nasional Bhd | | 1,931,600 | 6,602,895 |
| YTL Power International Bhd | | 8,024,300 | 2,926,622 |
|
| TOTAL MALAYSIA | | | 11,796,982 |
|
| Netherlands - 0.9% | | | |
| Gree Electric Appliances, Inc. of Zhuhai ELS (A Shares)(BNP Paribas Warrants Program) warrants 12/2/16 (b)(c) | | 1,457,900 | 4,819,672 |
| Hangzhou Hikvision Digital Technology Co. Ltd. ELS (A Shares) (BNP Paribas Warrant Program) warrants 11/27/17 (b)(c) | | 1,026,500 | 3,717,688 |
|
| TOTAL NETHERLANDS | | | 8,537,360 |
|
| Philippines - 0.9% | | | |
| Alliance Global Group, Inc. | | 2,226,500 | 655,590 |
| Ayala Land, Inc. | | 5,307,800 | 3,972,945 |
| Robinsons Land Corp. | | 1,865,700 | 1,192,319 |
| Security Bank Corp. | | 467,698 | 2,128,468 |
|
| TOTAL PHILIPPINES | | | 7,949,322 |
|
| Singapore - 1.5% | | | |
| Boustead Singapore Ltd. | | 630,288 | 405,468 |
| CWT Ltd. | | 322,000 | 457,107 |
| Mapletree Industrial (REIT) | | 2,480,251 | 3,066,330 |
| Sheng Siong Group Ltd. | | 5,146,800 | 3,865,880 |
| UOL Group Ltd. | | 1,075,700 | 4,383,985 |
| Wing Tai Holdings Ltd. | | 1,041,800 | 1,269,255 |
|
| TOTAL SINGAPORE | | | 13,448,025 |
|
| Taiwan - 15.0% | | | |
| Advanced Semiconductor Engineering, Inc. | | 4,835,000 | 5,686,252 |
| Chinatrust Financial Holding Co. Ltd. | | 141,520 | 76,307 |
| CTCI Corp. | | 2,238,000 | 3,290,080 |
| E.SUN Financial Holdings Co. Ltd. | | 11,935,343 | 6,795,103 |
| ECLAT Textile Co. Ltd. | | 356,000 | 4,053,602 |
| Fubon Financial Holding Co. Ltd. | | 5,765,000 | 8,191,700 |
| Hon Hai Precision Industry Co. Ltd. (Foxconn) | | 6,411,460 | 17,346,132 |
| Largan Precision Co. Ltd. | | 55,000 | 6,515,534 |
| Micro-Star International Co. Ltd. | | 1,656,000 | 4,774,423 |
| Nien Made Enterprise Co. Ltd. | | 587,000 | 6,814,216 |
| PChome Online, Inc. | | 312,963 | 3,404,739 |
| Pou Chen Corp. | | 3,843,000 | 5,204,691 |
| Taiwan Semiconductor Manufacturing Co. Ltd. | | 8,364,192 | 50,242,668 |
| Unified-President Enterprises Corp. | | 4,123,000 | 7,990,082 |
| Vanguard International Semiconductor Corp. | | 1,699,000 | 3,470,371 |
| Voltronic Power Technology Corp. | | 304,000 | 4,570,341 |
|
| TOTAL TAIWAN | | | 138,426,241 |
|
| Thailand - 1.8% | | | |
| Delta Electronics PCL (For. Reg.) | | 454,500 | 1,018,288 |
| Kasikornbank PCL (For. Reg.) | | 1,669,200 | 8,194,146 |
| PTT Global Chemical PCL (For. Reg.) | | 1,577,200 | 2,700,878 |
| Thai Beverage PCL | | 6,767,400 | 4,694,010 |
|
| TOTAL THAILAND | | | 16,607,322 |
|
| United Kingdom - 0.7% | | | |
| Jiangsu Yanghe Brewery Joint-Stock Co. Ltd. ELS (UBS Warrant Programme) warrants 10/23/17 (b)(c) | | 660,536 | 6,789,801 |
| United States of America - 1.0% | | | |
| China Biologic Products, Inc. (b) | | 35,700 | 4,216,527 |
| Cognizant Technology Solutions Corp. Class A (b) | | 92,500 | 4,749,875 |
|
| TOTAL UNITED STATES OF AMERICA | | | 8,966,402 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $811,826,674) | | | 879,205,704 |
| | | Principal Amount | Value |
|
| Nonconvertible Bonds - 0.1% | | | |
| India - 0.1% | | | |
NTPC Ltd. 8.49% 3/25/25
| | | |
| (Cost $449,651) | | 2,245,016 | 445,251 |
| | | Shares | Value |
|
| Money Market Funds - 4.4% | | | |
| Fidelity Cash Central Fund, 0.41% (d) | | 39,146,755 | 39,158,499 |
| Fidelity Securities Lending Cash Central Fund 0.48% (d)(e) | | 1,647,691 | 1,648,021 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $40,805,360) | | | 40,806,520 |
| TOTAL INVESTMENT PORTFOLIO - 99.8% | | | |
| (Cost $853,081,685) | | | 920,457,475 |
| NET OTHER ASSETS (LIABILITIES) - 0.2% | | | 1,807,888 |
| NET ASSETS - 100% | | | $922,265,363 |
Currency Abbreviations
INR – Indian rupee
Security Type Abbreviations
ELS – Equity-Linked Security
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $15,327,161 or 1.7% of net assets.
(d) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $64,698 |
| Fidelity Securities Lending Cash Central Fund | 72,033 |
| Total | $136,731 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $87,008,593 | $87,008,593 | $-- | $-- |
| Consumer Staples | 63,975,242 | 63,975,242 | -- | -- |
| Energy | 45,366,417 | 45,366,417 | -- | -- |
| Financials | 161,009,984 | 139,274,429 | 16,915,883 | 4,819,672 |
| Health Care | 44,874,285 | 44,698,898 | 175,387 | -- |
| Industrials | 48,956,560 | 48,956,560 | -- | -- |
| Information Technology | 241,687,344 | 136,798,007 | 104,889,337 | -- |
| Materials | 31,592,871 | 31,592,871 | -- | -- |
| Real Estate | 47,655,463 | 47,655,463 | -- | -- |
| Telecommunication Services | 53,923,841 | 22,484,133 | 31,439,708 | -- |
| Utilities | 53,155,104 | 45,526,680 | 7,628,424 | -- |
| Corporate Bonds | 445,251 | -- | 445,251 | -- |
| Money Market Funds | 40,806,520 | 40,806,520 | -- | -- |
| Total Investments in Securities: | $920,457,475 | $754,143,813 | $161,493,990 | $4,819,672 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $232,472,884 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Emerging Asia Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $1,566,669) — See accompanying schedule:
Unaffiliated issuers (cost $812,276,325) | $879,650,955 | |
| Fidelity Central Funds (cost $40,805,360) | 40,806,520 | |
| Total Investments (cost $853,081,685) | | $920,457,475 |
| Foreign currency held at value (cost $2,702,126) | | 2,703,557 |
| Receivable for investments sold | | 11,349,341 |
| Receivable for fund shares sold | | 269,474 |
| Dividends receivable | | 353,330 |
| Interest receivable | | 1,730 |
| Distributions receivable from Fidelity Central Funds | | 20,588 |
| Prepaid expenses | | 2,345 |
| Other receivables | | 385,682 |
| Total assets | | 935,543,522 |
| Liabilities | | |
| Payable for investments purchased | $9,528,636 | |
| Payable for fund shares redeemed | 689,818 | |
| Accrued management fee | 652,796 | |
| Other affiliated payables | 190,893 | |
| Other payables and accrued expenses | 569,291 | |
| Collateral on securities loaned, at value | 1,646,725 | |
| Total liabilities | | 13,278,159 |
| Net Assets | | $922,265,363 |
| Net Assets consist of: | | |
| Paid in capital | | $994,228,868 |
| Undistributed net investment income | | 8,874,495 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (147,640,120) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 66,802,120 |
| Net Assets, for 27,634,314 shares outstanding | | $922,265,363 |
| Net Asset Value, offering price and redemption price per share ($922,265,363 ÷ 27,634,314 shares) | | $33.37 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $24,259,314 |
| Interest | | 36,153 |
| Income from Fidelity Central Funds | | 136,731 |
| Income before foreign taxes withheld | | 24,432,198 |
| Less foreign taxes withheld | | (2,422,512) |
| Total income | | 22,009,686 |
| Expenses | | |
| Management fee | | |
| Basic fee | $6,369,309 | |
| Performance adjustment | 1,319,607 | |
| Transfer agent fees | 1,861,553 | |
| Accounting and security lending fees | 431,452 | |
| Custodian fees and expenses | 454,391 | |
| Independent trustees' fees and expenses | 4,043 | |
| Registration fees | 22,496 | |
| Audit | 101,872 | |
| Legal | 3,245 | |
| Interest | 1,262 | |
| Miscellaneous | 8,214 | |
| Total expenses before reductions | 10,577,444 | |
| Expense reductions | (10,918) | 10,566,526 |
| Net investment income (loss) | | 11,443,160 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (41,855,868) | |
| Fidelity Central Funds | 7,350 | |
| Foreign currency transactions | (276,616) | |
| Total net realized gain (loss) | | (42,125,134) |
Change in net unrealized appreciation (depreciation) on:
Investment securities (net of increase in deferred foreign taxes of $377,436) | 88,123,301 | |
| Assets and liabilities in foreign currencies | (11,391) | |
| Total change in net unrealized appreciation (depreciation) | | 88,111,910 |
| Net gain (loss) | | 45,986,776 |
| Net increase (decrease) in net assets resulting from operations | | $57,429,936 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $11,443,160 | $14,020,781 |
| Net realized gain (loss) | (42,125,134) | 31,654,705 |
| Change in net unrealized appreciation (depreciation) | 88,111,910 | (108,963,314) |
| Net increase (decrease) in net assets resulting from operations | 57,429,936 | (63,287,828) |
| Distributions to shareholders from net investment income | (4,222,099) | (9,800,314) |
| Share transactions | | |
| Proceeds from sales of shares | 45,716,202 | 198,826,376 |
| Reinvestment of distributions | 3,878,736 | 9,282,114 |
| Cost of shares redeemed | (188,738,895) | (238,285,271) |
| Net increase (decrease) in net assets resulting from share transactions | (139,143,957) | (30,176,781) |
| Redemption fees | 23,028 | 166,559 |
| Total increase (decrease) in net assets | (85,913,092) | (103,098,364) |
| Net Assets | | |
| Beginning of period | 1,008,178,455 | 1,111,276,819 |
| End of period | $922,265,363 | $1,008,178,455 |
| Other Information | | |
| Undistributed net investment income end of period | $8,874,495 | $2,018,342 |
| Shares | | |
| Sold | 1,462,017 | 5,802,749 |
| Issued in reinvestment of distributions | 126,673 | 283,510 |
| Redeemed | (6,266,447) | (7,416,166) |
| Net increase (decrease) | (4,677,757) | (1,329,907) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Emerging Asia Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $31.20 | $33.03 | $30.91 | $28.57 | $27.32 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .39 | .42 | .43 | .39 | .46 |
| Net realized and unrealized gain (loss) | 1.91 | (1.96) | 2.08 | 2.49 | 1.30 |
| Total from investment operations | 2.30 | (1.54) | 2.51 | 2.88 | 1.76 |
| Distributions from net investment income | (.13) | (.29) | (.39) | (.46) | (.51) |
| Distributions from net realized gain | – | – | – | (.08) | – |
| Total distributions | (.13) | (.29) | (.39) | (.54) | (.51) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $33.37 | $31.20 | $33.03 | $30.91 | $28.57 |
| Total ReturnC | 7.42% | (4.69)% | 8.21% | 10.19% | 6.60% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.16% | 1.09% | 1.04% | 1.08% | .94% |
| Expenses net of fee waivers, if any | 1.16% | 1.09% | 1.04% | 1.08% | .94% |
| Expenses net of all reductions | 1.16% | 1.09% | 1.04% | 1.05% | .91% |
| Net investment income (loss) | 1.25% | 1.26% | 1.36% | 1.31% | 1.68% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $922,265 | $1,008,178 | $1,111,277 | $1,172,348 | $1,325,208 |
| Portfolio turnover rateF | 77% | 68% | 90% | 97% | 94% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Emerging Asia Fund (the Fund) is a fund of Fidelity Investment Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
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 October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), 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 | $109,588,208 |
| Gross unrealized depreciation | (42,523,370) |
| Net unrealized appreciation (depreciation) on securities | $67,064,838 |
| Tax Cost | $853,392,637 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $10,270,616 |
| Capital loss carryforward | $(148,724,801) |
| Net unrealized appreciation (depreciation) on securities and other investments | $66,870,503 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(104,856,402) |
| No expiration | |
| Short-term | (16,191,445) |
| Long-term | (27,676,954) |
| Total no expiration | (43,868,399) |
| Total capital loss carryforward | $(148,724,801) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $4,222,099 | $ 9,800,314 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $692,058,490 and $805,278,577, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the Fund's relative investment performance as compared to its benchmark index, the MSCI All Country Asia ex Japan Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .84% 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 Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .20% of average net assets.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $1,512 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with Fidelity Management & Research Company (FMR) or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $5,946,500 | .58% | $956 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,312 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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 $72,033, including $12 from securities loaned to FCM.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $1,161,455. The weighted average interest rate was .86%. The interest expense amounted to $306 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $4,053 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $6,865.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Fidelity® Emerging Markets Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Emerging Markets Fund | 8.07% | 2.57% | 2.36% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Emerging Markets Fund, a class of the fund, on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI Emerging Markets Index performed over the same period.
| Period Ending Values |
| $12,633 | Fidelity® Emerging Markets Fund |
| $14,551 | MSCI Emerging Markets Index |
Fidelity® Emerging Markets Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Sammy Simnegar: For the year, the fund’s share classes returned slightly more than 8%, lagging the 9.67% return of the benchmark MSCI Emerging Markets Index. Versus the benchmark, sector positioning undercut favorable stock selection, particularly an overweighting in consumer staples and an underweighting in energy. Health care was a mixed bag, with favorable stock picks offset by the negative impact of a large overweighting. Geographically, my picks in Brazil and India hurt relative performance. The fund’s largest relative detractor was Petroleo Brasileiro – also known as Petrobras – Brazil’s large state-owned energy producer. We didn’t own Petrobras and so didn’t participate in this benchmark component’s 161% return. Other detractors included South Korea’s Samsung Electronics, a strong-performing index name we didn’t own for much of the period, and Brazilian bank Banco Bradesco, where our untimely ownership hurt. I sold Banco Bradesco from the fund by period end. Conversely, stock picking in consumer discretionary and financials added value. On a country basis, positioning in China helped. Our top relative contributor was a non-benchmark stake in Brazil-based Smiles, a firm that manages customer loyalty programs. The fund's overweighted holdings in two for-profit education companies, China-based TAL Education Group and Brazil’s Kroton Educacional, also proved timely.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Emerging Markets Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Cayman Islands | 13.4% |
| | India | 11.5% |
| | United States of America* | 10.6% |
| | Brazil | 8.9% |
| | Korea (South) | 7.8% |
| | South Africa | 7.5% |
| | Mexico | 7.3% |
| | Taiwan | 6.0% |
| | Indonesia | 3.6% |
| | Other | 23.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | India | 13.5% |
| | United States of America* | 11.6% |
| | Cayman Islands | 9.4% |
| | Mexico | 8.5% |
| | Brazil | 8.3% |
| | South Africa | 6.8% |
| | Korea (South) | 5.5% |
| | Taiwan | 5.2% |
| | Philippines | 3.9% |
| | Other | 27.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.2 | 98.7 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.8 | 1.3 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Tencent Holdings Ltd. (Cayman Islands, Internet Software & Services) | 4.2 | 3.4 |
| Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan, Semiconductors & Semiconductor Equipment) | 4.2 | 3.6 |
| Samsung Electronics Co. Ltd. (Korea (South), Technology Hardware, Storage & Peripherals) | 3.4 | 0.0 |
| Alibaba Group Holding Ltd. sponsored ADR (Cayman Islands, Internet Software & Services) | 3.2 | 1.6 |
| Naspers Ltd. Class N (South Africa, Media) | 2.4 | 2.0 |
| Baidu.com, Inc. sponsored ADR (Cayman Islands, Internet Software & Services) | 1.7 | 1.3 |
| Itau Unibanco Holding SA (Brazil, Banks) | 1.5 | 1.2 |
| Housing Development Finance Corp. Ltd. (India, Thrifts & Mortgage Finance) | 1.3 | 1.2 |
| Ambev SA sponsored ADR (Brazil, Beverages) | 1.2 | 1.2 |
| NAVER Corp. (Korea (South), Internet Software & Services) | 1.1 | 1.0 |
| | 24.2 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 26.2 | 21.7 |
| Financials | 16.8 | 18.4 |
| Consumer Staples | 16.0 | 13.8 |
| Consumer Discretionary | 13.5 | 14.2 |
| Industrials | 8.2 | 9.8 |
| Health Care | 7.6 | 8.3 |
| Materials | 4.6 | 5.8 |
| Utilities | 2.7 | 3.3 |
| Real Estate | 1.7 | 0.0 |
| Energy | 1.4 | 2.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Emerging Markets Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 94.9% | | | |
| | | Shares | Value |
| Argentina - 1.1% | | | |
| Banco Macro SA sponsored ADR | | 281,800 | $21,481,614 |
| Grupo Financiero Galicia SA sponsored ADR (a) | | 624,700 | 19,453,158 |
|
| TOTAL ARGENTINA | | | 40,934,772 |
|
| Australia - 0.9% | | | |
| Amcor Ltd. | | 1,462,104 | 16,349,671 |
| Sydney Airport unit | | 3,796,776 | 18,080,179 |
|
| TOTAL AUSTRALIA | | | 34,429,850 |
|
| Belgium - 0.5% | | | |
| Anheuser-Busch InBev SA NV | | 147,100 | 16,882,632 |
| Bermuda - 2.8% | | | |
| Axalta Coating Systems (b) | | 642,200 | 16,132,064 |
| Cheung Kong Infrastructure Holdings Ltd. | | 2,116,000 | 17,338,783 |
| China Gas Holdings Ltd. | | 12,302,000 | 18,749,107 |
| China Resource Gas Group Ltd. | | 6,441,000 | 20,222,724 |
| Credicorp Ltd. (United States) | | 194,732 | 28,952,754 |
|
| TOTAL BERMUDA | | | 101,395,432 |
|
| Brazil - 5.4% | | | |
| BB Seguridade Participacoes SA | | 2,441,820 | 24,586,496 |
| CCR SA | | 3,763,400 | 20,455,824 |
| Cielo SA | | 2,698,754 | 27,393,368 |
| Kroton Educacional SA | | 4,983,260 | 24,822,630 |
| Odontoprev SA | | 4,079,694 | 15,337,195 |
| Qualicorp SA | | 3,044,100 | 19,588,288 |
| Smiles SA | | 1,032,200 | 18,839,590 |
| Ultrapar Participacoes SA | | 1,185,600 | 26,865,429 |
| Weg SA | | 4,003,990 | 22,077,138 |
|
| TOTAL BRAZIL | | | 199,965,958 |
|
| Cayman Islands - 13.4% | | | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 1,161,900 | 118,153,611 |
| Baidu.com, Inc. sponsored ADR (b) | | 355,400 | 62,856,044 |
| Ctrip.com International Ltd. ADR (b) | | 720,100 | 31,792,415 |
| NetEase, Inc. ADR | | 136,500 | 35,079,135 |
| New Oriental Education & Technology Group, Inc. sponsored ADR | | 483,300 | 24,227,829 |
| Shenzhou International Group Holdings Ltd. | | 3,402,000 | 22,568,728 |
| Sino Biopharmaceutical Ltd. | | 32,397,000 | 22,682,558 |
| TAL Education Group ADR (a)(b) | | 250,400 | 20,392,576 |
| Tencent Holdings Ltd. | | 5,811,800 | 154,026,280 |
|
| TOTAL CAYMAN ISLANDS | | | 491,779,176 |
|
| China - 1.9% | | | |
| Inner Mongoli Yili Industries Co. Ltd. (A Shares) | | 6,457,008 | 17,143,595 |
| Jiangsu Hengrui Medicine Co. Ltd. (A Shares) | | 2,853,125 | 19,428,435 |
| Kweichow Moutai Co. Ltd. (A Shares) | | 368,892 | 17,310,017 |
| Shanghai International Airport Co. Ltd. (A Shares) | | 4,278,600 | 17,118,694 |
|
| TOTAL CHINA | | | 71,000,741 |
|
| France - 0.4% | | | |
| Dassault Systemes SA | | 207,462 | 16,429,265 |
| Germany - 0.5% | | | |
| Wirecard AG (a) | | 368,663 | 17,489,102 |
| Hong Kong - 2.3% | | | |
| AIA Group Ltd. | | 3,042,200 | 19,201,177 |
| CSPC Pharmaceutical Group Ltd. | | 22,438,000 | 23,260,958 |
| Guangdong Investment Ltd. | | 14,667,000 | 22,164,416 |
| Techtronic Industries Co. Ltd. | | 4,964,500 | 18,691,569 |
|
| TOTAL HONG KONG | | | 83,318,120 |
|
| India - 10.7% | | | |
| Amara Raja Batteries Ltd. | | 1,242,781 | 18,860,968 |
| Asian Paints Ltd. | | 1,259,949 | 20,208,535 |
| Colgate-Palmolive Ltd. | | 1,172,862 | 17,110,606 |
| Divi's Laboratories Ltd. | | 988,451 | 18,965,743 |
| Eicher Motors Ltd. | | 55,469 | 19,973,861 |
| GlaxoSmithKline Consumer Healthcare Ltd. | | 191,006 | 17,406,756 |
| Godrej Consumer Products Ltd. | | 882,934 | 21,298,546 |
| HDFC Bank Ltd. | | 845,121 | 18,885,099 |
| Hindustan Unilever Ltd. | | 1,701,741 | 21,340,181 |
| Housing Development Finance Corp. Ltd. | | 2,273,814 | 47,439,406 |
| IndusInd Bank Ltd. | | 997,879 | 17,948,387 |
| ITC Ltd. | | 7,753,207 | 28,255,632 |
| LIC Housing Finance Ltd. | | 2,368,838 | 20,694,566 |
| Power Grid Corp. of India Ltd. | | 6,881,239 | 18,145,593 |
| Sun Pharmaceutical Industries Ltd. | | 2,246,132 | 25,032,056 |
| Tata Consultancy Services Ltd. | | 834,250 | 29,999,280 |
| Titan Co. Ltd. | | 1,980,527 | 11,090,936 |
| Zee Entertainment Enterprises Ltd. | | 2,490,320 | 19,426,269 |
|
| TOTAL INDIA | | | 392,082,420 |
|
| Indonesia - 3.6% | | | |
| PT ACE Hardware Indonesia Tbk | | 224,374,400 | 14,702,645 |
| PT Bank Central Asia Tbk | | 26,238,400 | 31,219,433 |
| PT Bank Rakyat Indonesia Tbk | | 31,293,900 | 29,260,084 |
| PT Kalbe Farma Tbk | | 149,536,200 | 19,941,216 |
| PT Matahari Department Store Tbk | | 14,915,400 | 20,604,697 |
| PT Surya Citra Media Tbk | | 88,330,500 | 17,939,594 |
|
| TOTAL INDONESIA | | | 133,667,669 |
|
| Israel - 0.5% | | | |
| Frutarom Industries Ltd. | | 365,900 | 19,361,807 |
| Kenya - 0.5% | | | |
| Safaricom Ltd. | | 94,198,200 | 18,394,828 |
| Korea (South) - 7.8% | | | |
| AMOREPACIFIC Corp. | | 90,977 | 28,555,716 |
| AMOREPACIFIC Group, Inc. | | 173,287 | 22,423,050 |
| Coway Co. Ltd. | | 291,671 | 22,849,056 |
| KT&G Corp. | | 264,182 | 26,100,490 |
| LG Household & Health Care Ltd. | | 32,766 | 23,491,150 |
| NAVER Corp. | | 51,638 | 38,691,648 |
| Samsung Electronics Co. Ltd. | | 85,821 | 122,981,424 |
|
| TOTAL KOREA (SOUTH) | | | 285,092,534 |
|
| Luxembourg - 0.5% | | | |
| Eurofins Scientific SA | | 40,160 | 18,247,046 |
| Mexico - 7.3% | | | |
| Banregio Grupo Financiero S.A.B. de CV | | 2,857,515 | 18,722,536 |
| Embotelladoras Arca S.A.B. de CV | | 2,879,500 | 17,918,988 |
| Fomento Economico Mexicano S.A.B. de CV unit | | 3,601,567 | 34,546,537 |
| Gruma S.A.B. de CV Series B | | 1,582,255 | 21,953,673 |
| Grupo Aeroportuario del Pacifico S.A.B. de CV Series B | | 2,162,557 | 20,902,468 |
| Grupo Aeroportuario del Sureste S.A.B. de CV Series B | | 1,354,740 | 21,547,827 |
| Grupo Aeroportuario Norte S.A.B. de CV | | 2,921,600 | 16,998,484 |
| Grupo Financiero Banorte S.A.B. de CV Series O | | 5,048,400 | 29,730,565 |
| Kimberly-Clark de Mexico SA de CV Series A | | 9,160,200 | 19,753,968 |
| Megacable Holdings S.A.B. de CV unit | | 4,779,152 | 17,375,976 |
| Promotora y Operadora de Infraestructura S.A.B. de CV | | 1,723,775 | 19,270,602 |
| Wal-Mart de Mexico SA de CV Series V | | 13,139,600 | 27,800,254 |
|
| TOTAL MEXICO | | | 266,521,878 |
|
| Netherlands - 0.5% | | | |
| Yandex NV Series A (b) | | 851,600 | 16,768,004 |
| Philippines - 2.7% | | | |
| Ayala Corp. | | 1,140,930 | 19,671,410 |
| Ayala Land, Inc. | | 28,335,400 | 21,209,351 |
| D&L Industries, Inc. | | 76,809,200 | 17,414,283 |
| SM Investments Corp. | | 1,422,733 | 19,741,616 |
| SM Prime Holdings, Inc. | | 36,034,800 | 20,015,406 |
|
| TOTAL PHILIPPINES | | | 98,052,066 |
|
| Russia - 2.4% | | | |
| Magnit OJSC | | 163,269 | 27,374,058 |
| NOVATEK OAO GDR (Reg. S) | | 233,000 | 24,907,700 |
| Sberbank of Russia (b) | | 16,184,100 | 37,670,906 |
|
| TOTAL RUSSIA | | | 89,952,664 |
|
| South Africa - 7.5% | | | |
| Aspen Pharmacare Holdings Ltd. | | 1,104,790 | 24,066,745 |
| Bidcorp Ltd. | | 1,277,498 | 22,525,273 |
| Capitec Bank Holdings Ltd. | | 433,511 | 22,023,179 |
| Discovery Ltd. | | 2,570,785 | 21,969,523 |
| FirstRand Ltd. | | 8,267,900 | 29,628,622 |
| Mondi Ltd. | | 944,966 | 18,466,565 |
| Naspers Ltd. Class N | | 515,712 | 86,434,230 |
| Sanlam Ltd. | | 5,160,800 | 25,016,030 |
| Shoprite Holdings Ltd. | | 1,598,400 | 23,589,995 |
|
| TOTAL SOUTH AFRICA | | | 273,720,162 |
|
| Spain - 0.5% | | | |
| Amadeus IT Holding SA Class A | | 400,400 | 18,900,181 |
| Sweden - 0.5% | | | |
| ASSA ABLOY AB (B Shares) | | 1,003,800 | 18,242,515 |
| Switzerland - 1.0% | | | |
| Nestle SA (Reg. S) | | 246,798 | 17,896,288 |
| Sika AG | | 3,880 | 18,648,153 |
|
| TOTAL SWITZERLAND | | | 36,544,441 |
|
| Taiwan - 6.0% | | | |
| Advantech Co. Ltd. | | 2,226,000 | 18,144,917 |
| ECLAT Textile Co. Ltd. | | 1,710,288 | 19,474,234 |
| Largan Precision Co. Ltd. | | 244,000 | 28,905,276 |
| Taiwan Semiconductor Manufacturing Co. Ltd. | | 25,462,000 | 152,947,098 |
|
| TOTAL TAIWAN | | | 219,471,525 |
|
| Thailand - 2.0% | | | |
| Airports of Thailand PCL (For. Reg.) | | 1,986,900 | 21,605,677 |
| Bangkok Dusit Medical Services PCL (For. Reg.) | | 26,542,400 | 17,271,972 |
| Minor International PCL (For. Reg.) | | 17,047,800 | 18,732,509 |
| Thai Beverage PCL | | 22,505,100 | 15,610,006 |
|
| TOTAL THAILAND | | | 73,220,164 |
|
| United Arab Emirates - 0.4% | | | |
| DP World Ltd. | | 897,806 | 16,115,618 |
| United Kingdom - 1.5% | | | |
| British American Tobacco PLC (United Kingdom) | | 333,300 | 19,102,406 |
| Imperial Tobacco Group PLC | | 368,332 | 17,832,912 |
| NMC Health PLC | | 1,069,600 | 19,127,272 |
|
| TOTAL UNITED KINGDOM | | | 56,062,590 |
|
| United States of America - 9.8% | | | |
| A.O. Smith Corp. | | 375,400 | 16,956,818 |
| Alphabet, Inc. Class C (b) | | 22,145 | 17,373,638 |
| Amazon.com, Inc. (b) | | 21,180 | 16,728,388 |
| American Tower Corp. | | 144,700 | 16,957,393 |
| Amphenol Corp. Class A | | 285,300 | 18,809,829 |
| China Biologic Products, Inc. (b) | | 162,678 | 19,213,899 |
| Ecolab, Inc. | | 134,800 | 15,390,116 |
| Facebook, Inc. Class A (b) | | 126,100 | 16,517,839 |
| Gartner, Inc. (b) | | 175,100 | 15,065,604 |
| International Flavors & Fragrances, Inc. | | 131,210 | 17,159,644 |
| MasterCard, Inc. Class A | | 186,500 | 19,959,230 |
| Mettler-Toledo International, Inc. (b) | | 42,880 | 17,326,950 |
| Moody's Corp. | | 159,700 | 16,053,044 |
| MSCI, Inc. | | 233,700 | 18,740,403 |
| NIKE, Inc. Class B | | 321,000 | 16,107,780 |
| Philip Morris International, Inc. | | 185,900 | 17,928,196 |
| PPG Industries, Inc. | | 177,856 | 16,563,729 |
| S&P Global, Inc. | | 141,600 | 17,253,960 |
| TransDigm Group, Inc. | | 59,200 | 16,129,632 |
| Visa, Inc. Class A | | 212,800 | 17,558,128 |
| Yum! Brands, Inc. | | 203,100 | 17,523,468 |
|
| TOTAL UNITED STATES OF AMERICA | | | 361,317,688 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $2,856,971,806) | | | 3,485,360,848 |
|
| Preferred Stocks - 4.3% | | | |
| Convertible Preferred Stocks - 0.8% | | | |
| India - 0.8% | | | |
| PC Jeweller Ltd. 13.00% (c) | | 169,426,966 | 30,541,656 |
| Nonconvertible Preferred Stocks - 3.5% | | | |
| Brazil - 3.5% | | | |
| Ambev SA sponsored ADR | | 7,111,480 | 41,957,732 |
| Itau Unibanco Holding SA | | 4,625,910 | 55,650,045 |
| Itausa-Investimentos Itau SA (PN) | | 9,957,600 | 29,448,541 |
| | | | 127,056,318 |
| TOTAL PREFERRED STOCKS | | | |
| (Cost $135,138,743) | | | 157,597,974 |
|
| Money Market Funds - 1.5% | | | |
| Fidelity Cash Central Fund, 0.41% (d) | | 24,706,161 | 24,713,573 |
| Fidelity Securities Lending Cash Central Fund 0.48% (d)(e) | | 30,708,140 | 30,714,281 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $55,425,129) | | | 55,427,854 |
| TOTAL INVESTMENT PORTFOLIO - 100.7% | | | |
| (Cost $3,047,535,678) | | | 3,698,386,676 |
| NET OTHER ASSETS (LIABILITIES) - (0.7)% | | | (25,154,365) |
| NET ASSETS - 100% | | | $3,673,232,311 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $30,541,656 or 0.8% of net assets.
(d) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| PC Jeweller Ltd. 13.00% | 7/28/16 | $25,285,041 |
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 | $164,766 |
| Fidelity Securities Lending Cash Central Fund | 1,144,943 |
| Total | $1,309,709 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $490,866,775 | $460,325,119 | $30,541,656 | $-- |
| Consumer Staples | 583,108,657 | 546,109,963 | 36,998,694 | -- |
| Energy | 51,773,129 | 51,773,129 | -- | -- |
| Financials | 620,700,938 | 564,144,933 | 56,556,005 | -- |
| Health Care | 279,490,333 | 279,490,333 | -- | -- |
| Industrials | 304,077,921 | 285,835,406 | 18,242,515 | -- |
| Information Technology | 964,048,901 | 657,075,523 | 306,973,378 | -- |
| Materials | 175,694,567 | 175,694,567 | -- | -- |
| Real Estate | 58,182,150 | 58,182,150 | -- | -- |
| Telecommunication Services | 18,394,828 | 18,394,828 | -- | -- |
| Utilities | 96,620,623 | 96,620,623 | -- | -- |
| Money Market Funds | 55,427,854 | 55,427,854 | -- | -- |
| Total Investments in Securities: | $3,698,386,676 | $3,249,074,428 | $449,312,248 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $666,460,877 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Emerging Markets Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $29,603,506) — See accompanying schedule:
Unaffiliated issuers (cost $2,992,110,549) | $3,642,958,822 | |
| Fidelity Central Funds (cost $55,425,129) | 55,427,854 | |
| Total Investments (cost $3,047,535,678) | | $3,698,386,676 |
| Foreign currency held at value (cost $1,485) | | 1,510 |
| Receivable for investments sold | | 34,882,383 |
| Receivable for fund shares sold | | 2,810,835 |
| Dividends receivable | | 3,922,032 |
| Distributions receivable from Fidelity Central Funds | | 22,585 |
| Prepaid expenses | | 9,373 |
| Other receivables | | 1,673,132 |
| Total assets | | 3,741,708,526 |
| Liabilities | | |
| Payable for investments purchased | $31,581,198 | |
| Payable for fund shares redeemed | 2,892,668 | |
| Accrued management fee | 2,158,724 | |
| Other affiliated payables | 662,788 | |
| Other payables and accrued expenses | 470,026 | |
| Collateral on securities loaned, at value | 30,710,811 | |
| Total liabilities | | 68,476,215 |
| Net Assets | | $3,673,232,311 |
| Net Assets consist of: | | |
| Paid in capital | | $3,493,934,336 |
| Undistributed net investment income | | 17,935,313 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (488,808,056) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 650,170,718 |
| Net Assets | | $3,673,232,311 |
| Emerging Markets: | | |
| Net Asset Value, offering price and redemption price per share ($3,014,956,611 ÷ 124,350,769 shares) | | $24.25 |
| Class K: | | |
| Net Asset Value, offering price and redemption price per share ($658,275,700 ÷ 27,112,609 shares) | | $24.28 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $58,880,371 |
| Interest | | 1,142 |
| Income from Fidelity Central Funds | | 1,309,709 |
| Income before foreign taxes withheld | | 60,191,222 |
| Less foreign taxes withheld | | (5,368,976) |
| Total income | | 54,822,246 |
| Expenses | | |
| Management fee | $23,732,309 | |
| Transfer agent fees | 6,364,500 | |
| Accounting and security lending fees | 1,447,441 | |
| Custodian fees and expenses | 1,446,567 | |
| Independent trustees' fees and expenses | 14,556 | |
| Registration fees | 127,913 | |
| Audit | 122,674 | |
| Legal | 10,323 | |
| Interest | 7,392 | |
| Miscellaneous | 27,525 | |
| Total expenses before reductions | 33,301,200 | |
| Expense reductions | (161,739) | 33,139,461 |
| Net investment income (loss) | | 21,682,785 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (227,255,582) | |
| Fidelity Central Funds | 6,658 | |
| Foreign currency transactions | (567,012) | |
| Total net realized gain (loss) | | (227,815,936) |
Change in net unrealized appreciation (depreciation) on:
Investment securities (net of decrease in deferred foreign taxes of $363,195) | 470,386,999 | |
| Assets and liabilities in foreign currencies | (17,830) | |
| Total change in net unrealized appreciation (depreciation) | | 470,369,169 |
| Net gain (loss) | | 242,553,233 |
| Net increase (decrease) in net assets resulting from operations | | $264,236,018 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $21,682,785 | $26,242,657 |
| Net realized gain (loss) | (227,815,936) | (231,739,571) |
| Change in net unrealized appreciation (depreciation) | 470,369,169 | (191,944,680) |
| Net increase (decrease) in net assets resulting from operations | 264,236,018 | (397,441,594) |
| Distributions to shareholders from net investment income | (17,361,594) | (18,114,621) |
| Distributions to shareholders from net realized gain | – | (2,942,055) |
| Total distributions | (17,361,594) | (21,056,676) |
| Share transactions - net increase (decrease) | 131,573,266 | 716,596,433 |
| Redemption fees | 1,810,193 | 519,430 |
| Total increase (decrease) in net assets | 380,257,883 | 298,617,593 |
| Net Assets | | |
| Beginning of period | 3,292,974,428 | 2,994,356,835 |
| End of period | $3,673,232,311 | $3,292,974,428 |
| Other Information | | |
| Undistributed net investment income end of period | $17,935,313 | $15,496,040 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Emerging Markets Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $22.55 | $25.44 | $24.43 | $22.15 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .14 | .19 | .17 | .20 | .33 |
| Net realized and unrealized gain (loss) | 1.66 | (2.91) | .86 | 2.38 | (.11) |
| Total from investment operations | 1.80 | (2.72) | 1.03 | 2.58 | .22 |
| Distributions from net investment income | (.11) | (.14) | (.02) | (.30) | (.30) |
| Distributions from net realized gain | – | (.03) | – | – | – |
| Total distributions | (.11) | (.17) | (.02) | (.30) | (.30) |
| Redemption fees added to paid in capitalA | .01 | –B | –B | –B | –B |
| Net asset value, end of period | $24.25 | $22.55 | $25.44 | $24.43 | $22.15 |
| Total ReturnC | 8.07% | (10.76)% | 4.22% | 11.78% | 1.03% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.01% | 1.05% | 1.07% | 1.08% | 1.09% |
| Expenses net of fee waivers, if any | 1.01% | 1.05% | 1.07% | 1.08% | 1.09% |
| Expenses net of all reductions | 1.00% | 1.03% | 1.07% | 1.03% | 1.03% |
| Net investment income (loss) | .61% | .78% | .71% | .85% | 1.50% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $3,014,957 | $2,738,934 | $2,370,927 | $2,241,338 | $2,203,756 |
| Portfolio turnover rateF | 79% | 107% | 94% | 119% | 176% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Emerging Markets Fund Class K
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $22.58 | $25.48 | $24.42 | $22.15 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .18 | .24 | .23 | .25 | .37 |
| Net realized and unrealized gain (loss) | 1.66 | (2.92) | .86 | 2.38 | (.10) |
| Total from investment operations | 1.84 | (2.68) | 1.09 | 2.63 | .27 |
| Distributions from net investment income | (.15) | (.20) | (.03) | (.36) | (.35) |
| Distributions from net realized gain | – | (.03) | – | – | – |
| Total distributions | (.15) | (.22)B | (.03) | (.36) | (.35) |
| Redemption fees added to paid in capitalA | .01 | –C | –C | –C | –C |
| Net asset value, end of period | $24.28 | $22.58 | $25.48 | $24.42 | $22.15 |
| Total ReturnD | 8.27% | (10.60)% | 4.47% | 12.01% | 1.25% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .84% | .85% | .86% | .87% | .87% |
| Expenses net of fee waivers, if any | .84% | .85% | .85% | .87% | .87% |
| Expenses net of all reductions | .83% | .83% | .85% | .82% | .81% |
| Net investment income (loss) | .78% | .98% | .92% | 1.07% | 1.72% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $658,276 | $554,041 | $623,430 | $547,369 | $607,919 |
| Portfolio turnover rateG | 79% | 107% | 94% | 119% | 176% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.22 per share is comprised of distributions from net investment income of $.195 and distributions from net realized gain of $.025 per share.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Emerging Markets Fund (the Fund) is a fund of Fidelity Investment 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 Emerging Markets 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. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), 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 | $704,504,212 |
| Gross unrealized depreciation | (72,114,399) |
| Net unrealized appreciation (depreciation) on securities | $632,389,813 |
| Tax Cost | $3,065,996,863 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $17,893,472 |
| Capital loss carryforward | $(470,346,872) |
| Net unrealized appreciation (depreciation) on securities and other investments | $631,751,890 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(24,838,920) |
| No expiration | |
| Short-term | (360,338,760) |
| Long-term | (85,169,192) |
| Total no expiration | (445,507,952) |
| Total capital loss carryforward | $(470,346,872) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $17,361,593 | $ 21,056,676 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,816,722,956 and $2,675,719,953, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% 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 Emerging Markets, except for Class K. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Emerging Markets | $6,093,454 | .22 |
| Class K | 271,046 | .05 |
| | $6,364,500 | |
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 $14,120 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $45,190,667 | .65% | $7,392 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $8,668 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. The value of securities loaned to FCM at period end was $193,421. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $1,144,943, including $5,055 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 $136,860 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1,342.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $23,537.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Emerging Markets | $13,660,209 | $13,346,829 |
| Class K | 3,701,385 | 4,767,792 |
| Total | $17,361,594 | $18,114,621 |
| From net realized gain | | |
| Emerging Markets | $– | $2,332,143 |
| Class K | – | 609,912 |
| Total | $– | $2,942,055 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Emerging Markets | | | | |
| Shares sold | 40,381,882 | 55,410,811 | $879,217,354 | $1,332,719,199 |
| Reinvestment of distributions | 572,542 | 546,115 | 12,670,348 | 13,577,228 |
| Shares redeemed | (38,074,038) | (27,685,404) | (819,023,837) | (631,200,476) |
| Net increase (decrease) | 2,880,386 | 28,271,522 | $72,863,865 | $715,095,951 |
| Class K | | | | |
| Shares sold | 8,389,679 | 8,915,876 | $189,089,919 | $215,741,410 |
| Reinvestment of distributions | 167,256 | 216,324 | 3,701,385 | 5,377,704 |
| Shares redeemed | (5,977,816) | (9,064,709) | (134,081,903) | (219,618,632) |
| Net increase (decrease) | 2,579,119 | 67,491 | $58,709,401 | $1,500,482 |
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.
At the end of the period, Strategic Advisers Emerging Markets Fund was the owner of record of approximately 11% of the total outstanding shares of the Fund.
Fidelity® Europe Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Europe Fund | (6.42)% | 6.50% | 1.84% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Europe Fund, a class of the fund, on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI Europe Index performed over the same period.
| Period Ending Values |
| $12,000 | Fidelity® Europe Fund |
| $11,034 | MSCI Europe Index |
Fidelity® Europe Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Stefan Lindblad: For the one-year period ending October 31, 2016, the fund’s share classes (excluding sales charges, if applicable) posted negative results but, in general, modestly outpaced the -7.23% result of the fund’s benchmark MSCI Europe Index. Volatility was a consistent factor, stoked by the bottoming-out of commodities and its subsequent rebound, as well as by Brexit. Relative to the MSCI index, stock selection drove results, most notably in the consumer discretionary sector. Specifically, shares of German sports-apparel company adidas provided the biggest relative boost. The stock rose solidly throughout the period, and I sold our position to take profits after it reached my price target. Elsewhere, our position in Norwegian oil and gas company Statoil proved beneficial. I bought shares of Statoil when oil prices dropped to the low $30 range earlier in this reporting period. Once oil began to rally, I sold the position at a profit. Conversely, a combination of stock selection and an underweighting in the strong-performing materials sector held our relative performance back. Underweighting consumer staples also detracted. The fund’s most significant individual detractor, though, came from health care: Swedish medical tech company Getinge’s business restructuring has taken longer than expected, and the stock suffered.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Europe Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | United Kingdom | 20.5% |
| | Sweden | 15.4% |
| | Germany | 14.2% |
| | France | 8.7% |
| | Netherlands | 8.3% |
| | Switzerland | 8.2% |
| | Bailiwick of Jersey | 4.6% |
| | Bermuda | 3.5% |
| | Ireland | 3.3% |
| | Other* | 13.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | United Kingdom | 25.5% |
| | Sweden | 15.9% |
| | Germany | 14.5% |
| | France | 9.1% |
| | Denmark | 6.2% |
| | Bailiwick of Jersey | 5.5% |
| | Isle of Man | 3.8% |
| | Spain | 3.2% |
| | Ireland | 3.0% |
| | Other* | 13.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.6 | 98.3 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.4 | 1.7 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| SAP AG (Germany, Software) | 4.7 | 3.5 |
| Nestle SA (Reg. S) (Switzerland, Food Products) | 4.7 | 0.0 |
| Koninklijke Philips Electronics NV (Netherlands, Industrial Conglomerates) | 3.8 | 0.0 |
| Shire PLC (Bailiwick of Jersey, Biotechnology) | 3.3 | 3.2 |
| Getinge AB (B Shares) (Sweden, Health Care Equipment & Supplies) | 3.1 | 3.5 |
| Vostok New Ventures Ltd. SDR (Bermuda, Capital Markets) | 2.7 | 1.6 |
| Standard Chartered PLC (United Kingdom) (United Kingdom, Banks) | 2.7 | 3.0 |
| William Hill PLC (United Kingdom, Hotels, Restaurants & Leisure) | 2.6 | 3.1 |
| Investor AB (B Shares) (Sweden, Diversified Financial Services) | 2.3 | 0.0 |
| Svenska Cellulosa AB (SCA) (B Shares) (Sweden, Household Products) | 2.2 | 1.9 |
| | 32.1 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Industrials | 22.2 | 17.7 |
| Financials | 21.1 | 24.6 |
| Information Technology | 16.3 | 13.4 |
| Consumer Discretionary | 12.7 | 16.7 |
| Health Care | 12.4 | 17.3 |
| Consumer Staples | 7.8 | 3.8 |
| Materials | 2.4 | 1.9 |
| Real Estate | 2.0 | 0.0 |
| Energy | 1.5 | 1.6 |
| Utilities | 1.2 | 1.3 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Europe Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 99.6% | | | |
| | | Shares | Value |
| Bailiwick of Jersey - 4.6% | | | |
| Shire PLC | | 652,600 | $36,847,557 |
| Wolseley PLC | | 265,134 | 13,795,516 |
|
| TOTAL BAILIWICK OF JERSEY | | | 50,643,073 |
|
| Bermuda - 3.5% | | | |
| Vostok Emerging Finance Ltd. (depository receipt) (a)(b)(c) | | 53,380,307 | 8,746,849 |
| Vostok New Ventures Ltd. SDR (b) | | 3,952,236 | 29,645,653 |
|
| TOTAL BERMUDA | | | 38,392,502 |
|
| Denmark - 2.5% | | | |
| Nets A/S (d) | | 947,200 | 18,089,035 |
| Scandinavian Tobacco Group A/S | | 555,357 | 9,614,123 |
|
| TOTAL DENMARK | | | 27,703,158 |
|
| Finland - 1.4% | | | |
| Valmet Corp. | | 1,047,200 | 15,553,598 |
| France - 8.7% | | | |
| Bollore Group | | 3,447,549 | 11,353,641 |
| Capgemini SA | | 225,100 | 18,651,374 |
| Havas SA | | 2,857,100 | 23,243,724 |
| Publicis Groupe SA | | 144,746 | 9,930,933 |
| Rubis | | 148,500 | 13,543,359 |
| Wendel SA | | 167,500 | 19,269,904 |
|
| TOTAL FRANCE | | | 95,992,935 |
|
| Germany - 14.2% | | | |
| Bertrandt AG | | 44,200 | 4,708,919 |
| Brenntag AG | | 392,300 | 20,970,372 |
| CompuGroup Medical AG | | 259,600 | 11,493,078 |
| CTS Eventim AG | | 365,769 | 13,141,845 |
| EDAG Engineering Group AG (a) | | 199,079 | 3,278,085 |
| Fresenius Medical Care AG & Co. KGaA | | 139,900 | 11,395,434 |
| Fresenius SE & Co. KGaA | | 206,797 | 15,264,247 |
| GEA Group AG | | 386,506 | 14,945,508 |
| LEG Immobilien AG | | 124,390 | 10,492,435 |
| SAP AG | | 587,805 | 51,785,284 |
|
| TOTAL GERMANY | | | 157,475,207 |
|
| Ireland - 3.3% | | | |
| DCC PLC (United Kingdom) | | 149,700 | 12,212,466 |
| Ryanair Holdings PLC sponsored ADR | | 152,067 | 11,418,711 |
| United Drug PLC (United Kingdom) | | 1,554,241 | 12,432,125 |
|
| TOTAL IRELAND | | | 36,063,302 |
|
| Isle of Man - 3.1% | | | |
| Paysafe Group PLC (b) | | 4,237,010 | 22,455,814 |
| Playtech Ltd. | | 1,030,319 | 11,703,105 |
|
| TOTAL ISLE OF MAN | | | 34,158,919 |
|
| Italy - 1.1% | | | |
| Prada SpA | | 3,449,900 | 12,099,371 |
| Malta - 1.0% | | | |
| Kambi Group PLC (a)(b) | | 752,299 | 11,181,849 |
| Netherlands - 8.3% | | | |
| CSM NV (exchangeable) | | 634,600 | 14,643,208 |
| Intertrust NV | | 551,725 | 11,640,711 |
| Koninklijke Philips Electronics NV | | 1,401,300 | 42,224,201 |
| Koninklijke Wessanen NV | | 858,800 | 10,261,809 |
| Wolters Kluwer NV | | 345,200 | 13,359,646 |
|
| TOTAL NETHERLANDS | | | 92,129,575 |
|
| Norway - 2.3% | | | |
| Schibsted ASA (A Shares) | | 396,600 | 9,508,973 |
| TGS Nopec Geophysical Co. ASA (a) | | 812,300 | 16,467,500 |
|
| TOTAL NORWAY | | | 25,976,473 |
|
| Spain - 1.5% | | | |
| Amadeus IT Holding SA Class A | | 342,900 | 16,185,995 |
| Sweden - 15.4% | | | |
| AF AB (B Shares) | | 132,500 | 2,427,855 |
| Dometic Group AB | | 1,899,000 | 13,434,908 |
| Getinge AB (B Shares) | | 2,070,400 | 33,925,389 |
| Hemfosa Fastigheter AB | | 1,295,260 | 12,189,468 |
| Indutrade AB | | 903,300 | 16,791,580 |
| Investor AB (B Shares) | | 703,868 | 25,023,058 |
| Lundbergfoeretagen AB | | 94,092 | 6,094,210 |
| Nobia AB | | 634,800 | 5,531,215 |
| Nordea Bank AB | | 972,800 | 10,226,509 |
| Pandox AB (a) | | 708,200 | 11,228,139 |
| Svenska Cellulosa AB (SCA) (B Shares) | | 869,900 | 24,646,115 |
| Svenska Handelsbanken AB (A Shares) | | 652,600 | 8,896,977 |
|
| TOTAL SWEDEN | | | 170,415,423 |
|
| Switzerland - 8.2% | | | |
| ABB Ltd. (Reg.) | | 929,180 | 19,169,382 |
| Nestle SA (Reg. S) | | 713,854 | 51,764,346 |
| Panalpina Welttransport Holding AG | | 151,620 | 19,688,919 |
|
| TOTAL SWITZERLAND | | | 90,622,647 |
|
| United Kingdom - 20.5% | | | |
| Bunzl PLC | | 460,058 | 12,382,811 |
| CMC Markets PLC | | 3,189,300 | 7,409,229 |
| Dechra Pharmaceuticals PLC | | 982,700 | 16,177,994 |
| Diploma PLC | | 1,298,700 | 14,902,583 |
| Essentra PLC | | 1,990,100 | 12,423,000 |
| International Personal Finance PLC | | 4,993,203 | 17,998,899 |
| Micro Focus International PLC | | 611,300 | 16,019,630 |
| NCC Group Ltd. | | 5,707,500 | 13,238,432 |
| Prudential PLC | | 1,465,649 | 23,917,724 |
| Saga PLC | | 3,108,100 | 7,547,760 |
| Shawbrook Group PLC (b) | | 2,688,800 | 7,398,373 |
| Softcat PLC | | 3,064,278 | 12,152,191 |
| St. James's Place Capital PLC | | 553,762 | 6,405,254 |
| Standard Chartered PLC (United Kingdom) | | 3,361,700 | 29,292,698 |
| William Hill PLC | | 8,013,573 | 29,013,878 |
|
| TOTAL UNITED KINGDOM | | | 226,280,456 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $1,128,734,265) | | | 1,100,874,483 |
|
| Money Market Funds - 0.6% | | | |
| Fidelity Cash Central Fund, 0.41% (e) | | 166,227 | 166,277 |
| Fidelity Securities Lending Cash Central Fund 0.48% (e)(f) | | 6,435,642 | 6,436,929 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $6,602,742) | | | 6,603,206 |
| TOTAL INVESTMENT PORTFOLIO - 100.2% | | | |
| (Cost $1,135,337,007) | | | 1,107,477,689 |
| NET OTHER ASSETS (LIABILITIES) - (0.2)% | | | (2,396,126) |
| NET ASSETS - 100% | | | $1,105,081,563 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated company
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $18,089,035 or 1.6% of net assets.
(e) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(f) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $41,230 |
| Fidelity Securities Lending Cash Central Fund | 720,303 |
| Total | $761,533 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
| Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
| Vostok Emerging Finance Ltd. (depository receipt) | $1,697,310 | $3,320,861 | $-- | $-- | $8,746,849 |
| Total | $1,697,310 | $3,320,861 | $-- | $-- | $8,746,849 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $141,592,920 | $141,592,920 | $-- | $-- |
| Consumer Staples | 86,672,270 | 34,907,924 | 51,764,346 | -- |
| Energy | 16,467,500 | 16,467,500 | -- | -- |
| Financials | 229,127,931 | 196,313,230 | 32,814,701 | -- |
| Health Care | 137,535,824 | 89,292,833 | 48,242,991 | -- |
| Industrials | 245,905,708 | 184,512,125 | 61,393,583 | -- |
| Information Technology | 180,280,860 | 128,495,576 | 51,785,284 | -- |
| Materials | 27,066,208 | 27,066,208 | -- | -- |
| Real Estate | 22,681,903 | 22,681,903 | -- | -- |
| Utilities | 13,543,359 | 13,543,359 | -- | -- |
| Money Market Funds | 6,603,206 | 6,603,206 | -- | -- |
| Total Investments in Securities: | $1,107,477,689 | $861,476,784 | $246,000,905 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $85,486,358 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Europe Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $6,117,272) — See accompanying schedule:
Unaffiliated issuers (cost $1,121,922,247) | $1,092,127,634 | |
| Fidelity Central Funds (cost $6,602,742) | 6,603,206 | |
| Other affiliated issuers (cost $6,812,018) | 8,746,849 | |
| Total Investments (cost $1,135,337,007) | | $1,107,477,689 |
| Foreign currency held at value (cost $153,461) | | 153,461 |
| Receivable for investments sold | | 3,511,858 |
| Receivable for fund shares sold | | 278,359 |
| Dividends receivable | | 2,806,697 |
| Distributions receivable from Fidelity Central Funds | | 6,563 |
| Prepaid expenses | | 3,061 |
| Other receivables | | 423,422 |
| Total assets | | 1,114,661,110 |
| Liabilities | | |
| Payable for investments purchased | $458,926 | |
| Payable for fund shares redeemed | 1,590,155 | |
| Accrued management fee | 751,469 | |
| Distribution and service plan fees payable | 14,585 | |
| Other affiliated payables | 236,894 | |
| Other payables and accrued expenses | 93,635 | |
| Collateral on securities loaned, at value | 6,433,883 | |
| Total liabilities | | 9,579,547 |
| Net Assets | | $1,105,081,563 |
| Net Assets consist of: | | |
| Paid in capital | | $1,336,948,143 |
| Undistributed net investment income | | 11,516,901 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (215,386,504) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (27,996,977) |
| Net Assets | | $1,105,081,563 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($17,266,603 ÷ 505,352 shares) | | $34.17 |
| Maximum offering price per share (100/94.25 of $34.17) | | $36.25 |
| Class T: | | |
| Net Asset Value and redemption price per share ($6,979,957 ÷ 204,514 shares) | | $34.13 |
| Maximum offering price per share (100/96.50 of $34.13) | | $35.37 |
| Class C: | | |
| Net Asset Value and offering price per share ($9,006,792 ÷ 266,348 shares)(a) | | $33.82 |
| Europe: | | |
| Net Asset Value, offering price and redemption price per share ($1,066,488,228 ÷ 31,126,337 shares) | | $34.26 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($5,339,983 ÷ 155,749 shares) | | $34.29 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $26,678,819 |
| Income from Fidelity Central Funds | | 761,533 |
| Income before foreign taxes withheld | | 27,440,352 |
| Less foreign taxes withheld | | (2,468,243) |
| Total income | | 24,972,109 |
| Expenses | | |
| Management fee | | |
| Basic fee | $8,740,355 | |
| Performance adjustment | 1,346,685 | |
| Transfer agent fees | 2,432,154 | |
| Distribution and service plan fees | 196,334 | |
| Accounting and security lending fees | 577,574 | |
| Custodian fees and expenses | 120,074 | |
| Independent trustees' fees and expenses | 5,629 | |
| Registration fees | 92,430 | |
| Audit | 90,972 | |
| Legal | 7,723 | |
| Interest | 1,290 | |
| Miscellaneous | 11,035 | |
| Total expenses before reductions | 13,622,255 | |
| Expense reductions | (168,284) | 13,453,971 |
| Net investment income (loss) | | 11,518,138 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (10,268,323) | |
| Fidelity Central Funds | 5,266 | |
| Foreign currency transactions | (9,441) | |
| Total net realized gain (loss) | | (10,272,498) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | (89,572,080) | |
| Assets and liabilities in foreign currencies | (354,842) | |
| Total change in net unrealized appreciation (depreciation) | | (89,926,922) |
| Net gain (loss) | | (100,199,420) |
| Net increase (decrease) in net assets resulting from operations | | $(88,681,282) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $11,518,138 | $17,742,695 |
| Net realized gain (loss) | (10,272,498) | 56,856,298 |
| Change in net unrealized appreciation (depreciation) | (89,926,922) | (21,376,933) |
| Net increase (decrease) in net assets resulting from operations | (88,681,282) | 53,222,060 |
| Distributions to shareholders from net investment income | (15,981,681) | (31,603,696) |
| Distributions to shareholders from net realized gain | (5,885,187) | – |
| Total distributions | (21,866,868) | (31,603,696) |
| Share transactions - net increase (decrease) | (219,773,724) | 125,806,049 |
| Redemption fees | 22,478 | 48,244 |
| Total increase (decrease) in net assets | (330,299,396) | 147,472,657 |
| Net Assets | | |
| Beginning of period | 1,435,380,959 | 1,287,908,302 |
| End of period | $1,105,081,563 | $1,435,380,959 |
| Other Information | | |
| Undistributed net investment income end of period | $11,516,901 | $15,983,003 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $37.06 | $36.24 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .22 | .37 | .47 |
| Net realized and unrealized gain (loss) | (2.67) | 1.29 | (3.68) |
| Total from investment operations | (2.45) | 1.66 | (3.21) |
| Distributions from net investment income | (.29) | (.84) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.44) | (.84) | – |
| Redemption fees added to paid in capitalB,C | – | – | – |
| Net asset value, end of period | $34.17 | $37.06 | $36.24 |
| Total ReturnD,E,F | (6.69)% | 4.63% | (8.14)% |
| Ratios to Average Net AssetsG,H | | | |
| Expenses before reductions | 1.39% | 1.33% | 1.35%I |
| Expenses net of fee waivers, if any | 1.39% | 1.33% | 1.35%I |
| Expenses net of all reductions | 1.38% | 1.31% | 1.35%I |
| Net investment income (loss) | .62% | .98% | 1.94%I |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $17,267 | $23,381 | $23,633 |
| Portfolio turnover rateJ | 62% | 87% | 80%K |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $36.94 | $36.18 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .11 | .26 | .40 |
| Net realized and unrealized gain (loss) | (2.67) | 1.29 | (3.67) |
| Total from investment operations | (2.56) | 1.55 | (3.27) |
| Distributions from net investment income | (.09) | (.79) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.25)C | (.79) | – |
| Redemption fees added to paid in capitalB,D | – | – | – |
| Net asset value, end of period | $34.13 | $36.94 | $36.18 |
| Total ReturnE,F,G | (6.99)% | 4.33% | (8.29)% |
| Ratios to Average Net AssetsH,I | | | |
| Expenses before reductions | 1.70% | 1.61% | 1.62%J |
| Expenses net of fee waivers, if any | 1.70% | 1.61% | 1.61%J |
| Expenses net of all reductions | 1.68% | 1.59% | 1.61%J |
| Net investment income (loss) | .31% | .70% | 1.68%J |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $6,980 | $9,632 | $13,679 |
| Portfolio turnover rateK | 62% | 87% | 80%L |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.25 per share is comprised of distributions from net investment income of $.092 and distributions from net realized gain of $.154 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Total returns do not include the effect of the sales charges.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $36.81 | $36.07 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | (.06) | .07 | .29 |
| Net realized and unrealized gain (loss) | (2.65) | 1.29 | (3.67) |
| Total from investment operations | (2.71) | 1.36 | (3.38) |
| Distributions from net investment income | (.12) | (.62) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.28)C | (.62) | – |
| Redemption fees added to paid in capitalB,D | – | – | – |
| Net asset value, end of period | $33.82 | $36.81 | $36.07 |
| Total ReturnE,F,G | (7.43)% | 3.79% | (8.57)% |
| Ratios to Average Net AssetsH,I | | | |
| Expenses before reductions | 2.18% | 2.13% | 2.10%J |
| Expenses net of fee waivers, if any | 2.18% | 2.13% | 2.10%J |
| Expenses net of all reductions | 2.17% | 2.11% | 2.10%J |
| Net investment income (loss) | (.17)% | .18% | 1.19%J |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $9,007 | $11,151 | $6,818 |
| Portfolio turnover rateK | 62% | 87% | 80%L |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.28 per share is comprised of distributions from net investment income of $.123 and distributions from net realized gain of $.154 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Total returns do not include the effect of the contingent deferred sales charge.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $37.19 | $36.32 | $37.92 | $30.15 | $27.67 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .33 | .48 | .94B | .61 | .64 |
| Net realized and unrealized gain (loss) | (2.68) | 1.30 | (2.00) | 7.87 | 2.45 |
| Total from investment operations | (2.35) | 1.78 | (1.06) | 8.48 | 3.09 |
| Distributions from net investment income | (.43) | (.91) | (.52) | (.70) | (.60) |
| Distributions from net realized gain | (.15) | – | (.02) | (.01) | (.02) |
| Total distributions | (.58) | (.91) | (.54) | (.71) | (.61)C |
| Redemption fees added to paid in capitalA,D | – | – | – | – | – |
| Net asset value, end of period | $34.26 | $37.19 | $36.32 | $37.92 | $30.15 |
| Total ReturnE | (6.42)% | 4.97% | (2.82)% | 28.71% | 11.53% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | 1.07% | 1.03% | .97% | 1.06% | .83% |
| Expenses net of fee waivers, if any | 1.07% | 1.03% | .97% | 1.05% | .83% |
| Expenses net of all reductions | 1.06% | 1.01% | .96% | 1.02% | .80% |
| Net investment income (loss) | .94% | 1.28% | 2.43%B | 1.82% | 2.33% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,066,488 | $1,384,134 | $1,237,047 | $957,048 | $602,520 |
| Portfolio turnover rateH | 62% | 87% | 80%I | 59% | 127% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.19 per share. Excluding thi non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.93%.
C Total distributions of $.61 per share is comprised of distributions from net investment income of $.595 and distributions from net realized gain of $.017 per share.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Europe Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $37.21 | $36.32 | $39.45 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .35 | .50 | .56 |
| Net realized and unrealized gain (loss) | (2.67) | 1.30 | (3.69) |
| Total from investment operations | (2.32) | 1.80 | (3.13) |
| Distributions from net investment income | (.45) | (.91) | – |
| Distributions from net realized gain | (.15) | – | – |
| Total distributions | (.60) | (.91) | – |
| Redemption fees added to paid in capitalB,C | – | – | – |
| Net asset value, end of period | $34.29 | $37.21 | $36.32 |
| Total ReturnD,E | (6.33)% | 5.02% | (7.93)% |
| Ratios to Average Net AssetsF,G | | | |
| Expenses before reductions | 1.01% | .98% | .97%H |
| Expenses net of fee waivers, if any | 1.01% | .98% | .97%H |
| Expenses net of all reductions | 1.00% | .96% | .96%H |
| Net investment income (loss) | 1.00% | 1.33% | 2.33%H |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $5,340 | $6,552 | $5,666 |
| Portfolio turnover rateI | 62% | 87% | 80%J |
A For the period March 18, 2014 (commencement of sale of shares) to October 31, 2014.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Europe Fund (the Fund) is a fund of Fidelity Investment 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, Europe and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs)and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), deferred trustees compensation, expiring capital loss carryforwards, 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 | $95,205,986 |
| Gross unrealized depreciation | (131,418,275) |
| Net unrealized appreciation (depreciation) on securities | $(36,212,289) |
| Tax Cost | $1,143,689,978 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $15,376,217 |
| Capital loss carryforward | $(210,891,559) |
| Net unrealized appreciation (depreciation) on securities and other investments | $(36,349,948) |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(199,044,876) |
| No expiration | |
| Short-term | (11,846,683) |
| Total capital loss carryforward | $(210,891,559) |
Due to large redemptions in a prior period, $199,044,876 of capital losses that existed in the Fund prior to the mergers will be limited to approximately $32,029,274 per year.
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31,2015 |
| Ordinary Income | $21,866,868 | $ 31,603,696 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital. In November 2016, the Board of Trustees approved the elimination of these redemption fees effective December 12, 2016.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $774,962,231 and $1,005,252,770, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Europe as compared to its benchmark index, the MSCI Europe Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .81% 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
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $50,523 | $1,529 |
| Class T | .25% | .25% | 41,037 | 128 |
| Class B | .75% | .25% | 2,439 | 1,885 |
| Class C | .75% | .25% | 102,335 | 24,319 |
| | | | $196,334 | $27,861 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $12,563 |
| Class T | 1,042 |
| Class B(a) | 124 |
| Class C(a) | 3,282 |
| | $17,011 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $53,055 | .26 |
| Class T | 26,058 | .32 |
| Class B | 689 | .29 |
| Class C | 30,814 | .30 |
| Europe | 2,314,244 | .19 |
| Class I | 7,294 | .13 |
| | $2,432,154 | |
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 $35 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $6,488,500 | .60% | $1,290 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,194 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $720,303. 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 $158,326 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $9,958.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $174,443 | $549,660 |
| Class T | 23,347 | 299,142 |
| Class B | – | 18,443 |
| Class C | 38,160 | 108,670 |
| Europe | 15,664,870 | 30,497,764 |
| Class I | 80,861 | 130,017 |
| Total | $15,981,681 | $31,603,696 |
| From net realized gain | | |
| Class A | $94,260 | $– |
| Class T | 39,080 | – |
| Class C | 47,778 | – |
| Europe | 5,676,211 | – |
| Class I | 27,858 | – |
| Total | $5,885,187 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 144,459 | 402,890 | $5,004,460 | $15,313,815 |
| Reinvestment of distributions | 7,044 | 14,493 | 257,822 | 527,143 |
| Shares redeemed | (277,024) | (438,670) | (9,579,027) | (16,388,542) |
| Net increase (decrease) | (125,521) | (21,287) | $(4,316,745) | $(547,584) |
| Class T | | | | |
| Shares sold | 18,157 | 101,998 | $629,088 | $3,848,880 |
| Reinvestment of distributions | 1,677 | 8,153 | 61,481 | 296,280 |
| Shares redeemed | (76,071) | (227,511) | (2,635,140) | (8,571,443) |
| Net increase (decrease) | (56,237) | (117,360) | $(1,944,571) | $(4,426,283) |
| Class B | | | | |
| Shares sold | 183 | 7,973 | $6,069 | $306,370 |
| Reinvestment of distributions | – | 481 | – | 17,468 |
| Shares redeemed | (14,607) | (23,568) | (499,471) | (877,823) |
| Net increase (decrease) | (14,424) | (15,114) | $(493,402) | $(553,985) |
| Class C | | | | |
| Shares sold | 64,049 | 197,774 | $2,232,592 | $7,494,390 |
| Reinvestment of distributions | 2,232 | 2,632 | 81,438 | 95,708 |
| Shares redeemed | (102,859) | (86,511) | (3,518,604) | (3,194,278) |
| Net increase (decrease) | (36,578) | 113,895 | $(1,204,574) | $4,395,820 |
| Europe | | | | |
| Shares sold | 2,489,815 | 10,168,406 | $86,835,858 | $387,319,779 |
| Reinvestment of distributions | 559,844 | 803,462 | 20,484,708 | 29,241,922 |
| Shares redeemed | (9,143,028) | (7,807,853) | (318,516,566) | (290,372,067) |
| Net increase (decrease) | (6,093,369) | 3,164,015 | $(211,196,000) | $126,189,634 |
| Class I | | | | |
| Shares sold | 73,750 | 130,676 | $2,648,638 | $4,946,083 |
| Reinvestment of distributions | 2,803 | 2,526 | 102,586 | 91,940 |
| Shares redeemed | (96,879) | (113,122) | (3,369,656) | (4,289,576) |
| Net increase (decrease) | (20,326) | 20,080 | $(618,432) | $748,447 |
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.
Fidelity® Japan Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Japan Fund | 6.80% | 7.21% | 0.13% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Japan Fund, a class of the fund, on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the Tokyo Stock Price Index (TOPIX) performed over the same period.
| Period Ending Values |
| $10,135 | Fidelity® Japan Fund |
| $11,698 | Tokyo Stock Price Index (TOPIX) |
Fidelity® Japan Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Kirk Neureiter: For the year, the fund’s share classes (excluding sales charges, if applicable) recorded single-digit gains that outpaced the 4.97% return of the benchmark Tokyo Stock Price Index by about 1 to 2 percentage points. Versus the benchmark, the fund was helped by stock selection in industrials, positioning in financials and a zero-weighting in the lagging utilities sector. A positive fair-value adjustment of 0.93 percentage points also lifted relative results. Our top relative contributor was DeNA, a provider of online gaming and e-commerce services. Our overweighting here proved timely, as the stock more than doubled in value this period. A second beneficial overweighting was Toshiba Plant Systems & Services, a company that builds and maintains power plants. KDDI, another relative contributor, is one of Japan’s major telecommunication-services providers and was the fund’s largest holding at period end. An out-of-benchmark stake in Sompo Care Message – which I sold – also rewarded us. Conversely, my picks in information technology weighed on relative performance. To a lesser extent, consumer discretionary and real estate decisions also hurt. An overweighting in real estate company Mitsui Fudosan was our largest relative detractor; I eliminated the position prior to period end. Tech-hardware maker Hitachi – also sold – hurt as well, as did our overweighting in East Japan Railway.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Japan Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Japan | 98.3% |
| | United States of America* | 1.1% |
| | Cayman Islands | 0.6% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Japan | 98.1% |
| | Cayman Islands | 1.0% |
| | United States of America* | 0.9% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 98.9 | 99.1 |
| Short-Term Investments and Net Other Assets (Liabilities) | 1.1 | 0.9 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| KDDI Corp. (Wireless Telecommunication Services) | 4.4 | 4.1 |
| SoftBank Corp. (Wireless Telecommunication Services) | 3.7 | 3.1 |
| Astellas Pharma, Inc. (Pharmaceuticals) | 3.7 | 5.0 |
| ORIX Corp. (Diversified Financial Services) | 3.6 | 3.3 |
| Sony Corp. (Household Durables) | 3.6 | 2.6 |
| Mitsubishi UFJ Financial Group, Inc. (Banks) | 3.3 | 3.1 |
| Hoya Corp. (Health Care Equipment & Supplies) | 3.2 | 3.3 |
| East Japan Railway Co. (Road & Rail) | 3.0 | 4.2 |
| Honda Motor Co. Ltd. (Automobiles) | 2.6 | 2.4 |
| Suzuki Motor Corp. (Automobiles) | 2.5 | 1.9 |
| | 33.6 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Consumer Discretionary | 21.2 | 20.3 |
| Industrials | 14.1 | 12.7 |
| Information Technology | 13.2 | 12.7 |
| Health Care | 12.3 | 13.5 |
| Financials | 11.6 | 16.4 |
| Consumer Staples | 11.1 | 9.9 |
| Telecommunication Services | 9.9 | 9.1 |
| Materials | 5.2 | 4.5 |
| Real Estate | 0.3 | 0.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Japan Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 98.9% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 21.2% | | | |
| Auto Components - 3.8% | | | |
| Bridgestone Corp. | | 143,900 | $5,372,065 |
| DaikyoNishikawa Corp. | | 125,600 | 1,624,045 |
| Hi-Lex Corp. | | 17,200 | 470,716 |
| NGK Spark Plug Co. Ltd. | | 214,300 | 4,242,269 |
| Sumitomo Electric Industries Ltd. | | 249,000 | 3,690,955 |
| | | | 15,400,050 |
| Automobiles - 6.8% | | | |
| Fuji Heavy Industries Ltd. | | 89,600 | 3,497,877 |
| Honda Motor Co. Ltd. | | 352,800 | 10,556,349 |
| Isuzu Motors Ltd. | | 255,600 | 3,167,276 |
| Suzuki Motor Corp. | | 284,700 | 10,126,166 |
| | | | 27,347,668 |
| Hotels, Restaurants & Leisure - 0.8% | | | |
| Skylark Co. Ltd. | | 230,600 | 3,247,794 |
| Household Durables - 5.2% | | | |
| Casio Computer Co. Ltd. (a) | | 189,200 | 2,644,867 |
| Rinnai Corp. | | 41,200 | 3,967,960 |
| Sony Corp. | | 457,600 | 14,422,750 |
| | | | 21,035,577 |
| Internet & Direct Marketing Retail - 1.5% | | | |
| Rakuten, Inc. | | 317,600 | 3,672,070 |
| Start Today Co. Ltd. | | 123,900 | 2,178,617 |
| | | | 5,850,687 |
| Media - 1.1% | | | |
| Dentsu, Inc. | | 40,200 | 2,008,658 |
| NEXT Co. Ltd. (a) | | 211,100 | 1,779,464 |
| Proto Corp. | | 62,400 | 708,077 |
| | | | 4,496,199 |
| Multiline Retail - 0.5% | | | |
| Don Quijote Holdings Co. Ltd. | | 50,700 | 1,931,406 |
| Specialty Retail - 1.5% | | | |
| Nitori Holdings Co. Ltd. | | 15,600 | 1,869,858 |
| USS Co. Ltd. | | 179,400 | 3,041,606 |
| Xebio Holdings Co. Ltd. | | 78,700 | 1,223,989 |
| | | | 6,135,453 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 85,444,834 |
|
| CONSUMER STAPLES - 11.1% | | | |
| Beverages - 1.5% | | | |
| Asahi Group Holdings | | 166,200 | 5,944,657 |
| Food & Staples Retailing - 6.1% | | | |
| Ain Holdings, Inc. | | 39,300 | 2,656,975 |
| San-A Co. Ltd. | | 49,600 | 2,705,369 |
| Seven & i Holdings Co. Ltd. | | 182,500 | 7,627,515 |
| Sundrug Co. Ltd. | | 50,800 | 4,006,065 |
| Tsuruha Holdings, Inc. | | 22,800 | 2,635,034 |
| Welcia Holdings Co. Ltd. | | 74,700 | 5,107,266 |
| | | | 24,738,224 |
| Food Products - 0.1% | | | |
| Japan Meat Co. Ltd. | | 31,900 | 449,283 |
| Personal Products - 1.0% | | | |
| Kao Corp. | | 77,400 | 3,989,196 |
| Tobacco - 2.4% | | | |
| Japan Tobacco, Inc. | | 249,700 | 9,509,887 |
|
| TOTAL CONSUMER STAPLES | | | 44,631,247 |
|
| FINANCIALS - 11.6% | | | |
| Banks - 4.3% | | | |
| Mitsubishi UFJ Financial Group, Inc. | | 2,551,400 | 13,164,743 |
| Shinsei Bank Ltd. | | 2,594,000 | 4,205,016 |
| | | | 17,369,759 |
| Capital Markets - 0.5% | | | |
| Monex Group, Inc. | | 833,700 | 1,915,912 |
| Diversified Financial Services - 4.0% | | | |
| Kyushu Railway Co. | | 50,600 | 1,490,932 |
| ORIX Corp. | | 912,300 | 14,488,754 |
| | | | 15,979,686 |
| Insurance - 2.8% | | | |
| Sony Financial Holdings, Inc. | | 201,600 | 2,837,433 |
| Tokio Marine Holdings, Inc. | | 217,800 | 8,616,880 |
| | | | 11,454,313 |
|
| TOTAL FINANCIALS | | | 46,719,670 |
|
| HEALTH CARE - 12.3% | | | |
| Biotechnology - 0.6% | | | |
| PeptiDream, Inc. (a)(b) | | 44,300 | 2,289,559 |
| Health Care Equipment & Supplies - 5.5% | | | |
| Hoya Corp. | | 310,500 | 12,983,146 |
| Olympus Corp. | | 259,300 | 9,272,194 |
| | | | 22,255,340 |
| Health Care Providers & Services - 2.0% | | | |
| Miraca Holdings, Inc. | | 71,800 | 3,478,059 |
| Ship Healthcare Holdings, Inc. | | 140,300 | 4,113,879 |
| Solasto Corp. | | 45,300 | 504,101 |
| | | | 8,096,039 |
| Pharmaceuticals - 4.2% | | | |
| Astellas Pharma, Inc. | | 990,400 | 14,699,381 |
| Shionogi & Co. Ltd. | | 42,500 | 2,098,455 |
| | | | 16,797,836 |
|
| TOTAL HEALTH CARE | | | 49,438,774 |
|
| INDUSTRIALS - 14.1% | | | |
| Building Products - 1.5% | | | |
| Daikin Industries Ltd. | | 64,500 | 6,199,676 |
| Construction & Engineering - 1.1% | | | |
| Toshiba Plant Systems & Services Corp. | | 265,900 | 4,297,707 |
| Electrical Equipment - 3.6% | | | |
| Mitsubishi Electric Corp. | | 447,000 | 6,063,293 |
| Nidec Corp. | | 88,900 | 8,621,274 |
| | | | 14,684,567 |
| Machinery - 2.4% | | | |
| Komatsu Ltd. | | 61,500 | 1,368,935 |
| Kubota Corp. | | 219,600 | 3,548,319 |
| Makita Corp. | | 65,700 | 4,554,582 |
| | | | 9,471,836 |
| Professional Services - 0.7% | | | |
| Benefit One, Inc. | | 35,900 | 1,040,679 |
| Outsourcing, Inc. | | 51,500 | 1,959,426 |
| | | | 3,000,105 |
| Road & Rail - 3.0% | | | |
| East Japan Railway Co. | | 136,400 | 12,040,191 |
| Trading Companies & Distributors - 1.8% | | | |
| Misumi Group, Inc. | | 321,800 | 5,882,432 |
| Mitsui & Co. Ltd. | | 89,500 | 1,244,312 |
| | | | 7,126,744 |
|
| TOTAL INDUSTRIALS | | | 56,820,826 |
|
| INFORMATION TECHNOLOGY - 13.2% | | | |
| Electronic Equipment & Components - 6.9% | | | |
| Alps Electric Co. Ltd. | | 20,600 | 495,013 |
| Azbil Corp. | | 162,900 | 4,846,458 |
| Iriso Electronics Co. Ltd. | | 18,100 | 997,597 |
| Murata Manufacturing Co. Ltd. | | 18,700 | 2,615,896 |
| OMRON Corp. | | 55,600 | 2,136,626 |
| Shimadzu Corp. | | 613,000 | 8,937,513 |
| TDK Corp. | | 55,400 | 3,835,263 |
| Topcon Corp. | | 259,500 | 3,887,427 |
| | | | 27,751,793 |
| Internet Software & Services - 3.6% | | | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 23,400 | 2,379,546 |
| DeNA Co. Ltd. | | 158,100 | 5,095,623 |
| Kakaku.com, Inc. | | 411,900 | 6,932,426 |
| | | | 14,407,595 |
| IT Services - 0.3% | | | |
| Otsuka Corp. | | 25,900 | 1,234,862 |
| Semiconductors & Semiconductor Equipment - 0.9% | | | |
| Sumco Corp. | | 367,100 | 3,857,578 |
| Software - 1.5% | | | |
| COLOPL, Inc. (a) | | 117,000 | 1,688,004 |
| Nintendo Co. Ltd. | | 17,600 | 4,242,659 |
| | | | 5,930,663 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 53,182,491 |
|
| MATERIALS - 5.2% | | | |
| Chemicals - 5.2% | | | |
| Daicel Chemical Industries Ltd. | | 208,300 | 2,748,996 |
| Hitachi Chemical Co. Ltd. | | 134,900 | 3,164,432 |
| Kansai Paint Co. Ltd. | | 172,100 | 3,708,840 |
| Shin-Etsu Chemical Co. Ltd. | | 87,600 | 6,658,335 |
| Toray Industries, Inc. | | 524,000 | 4,890,733 |
| | | | 21,171,336 |
| REAL ESTATE - 0.3% | | | |
| Equity Real Estate Investment Trusts (REITs) - 0.3% | | | |
| Invincible Investment Corp. | | 2,530 | 1,230,380 |
| TELECOMMUNICATION SERVICES - 9.9% | | | |
| Diversified Telecommunication Services - 1.8% | | | |
| Nippon Telegraph & Telephone Corp. | | 161,300 | 7,151,532 |
| Wireless Telecommunication Services - 8.1% | | | |
| KDDI Corp. | | 580,800 | 17,652,357 |
| SoftBank Corp. | | 240,400 | 15,140,662 |
| | | | 32,793,019 |
|
| TOTAL TELECOMMUNICATION SERVICES | | | 39,944,551 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $353,862,189) | | | 398,584,109 |
|
| Money Market Funds - 1.7% | | | |
| Fidelity Cash Central Fund, 0.41% (c) | | 736,671 | 736,892 |
| Fidelity Securities Lending Cash Central Fund 0.48% (c)(d) | | 6,257,647 | 6,258,898 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $6,995,387) | | | 6,995,790 |
| TOTAL INVESTMENT PORTFOLIO - 100.6% | | | |
| (Cost $360,857,576) | | | 405,579,899 |
| NET OTHER ASSETS (LIABILITIES) - (0.6)% | | | (2,431,690) |
| NET ASSETS - 100% | | | $403,148,209 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $5,453 |
| Fidelity Securities Lending Cash Central Fund | 124,193 |
| Total | $129,646 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $85,444,834 | $60,465,735 | $24,979,099 | $-- |
| Consumer Staples | 44,631,247 | 44,631,247 | -- | -- |
| Financials | 46,719,670 | 33,554,927 | 13,164,743 | -- |
| Health Care | 49,438,774 | 34,739,393 | 14,699,381 | -- |
| Industrials | 56,820,826 | 55,451,891 | 1,368,935 | -- |
| Information Technology | 53,182,491 | 48,939,832 | 4,242,659 | -- |
| Materials | 21,171,336 | 21,171,336 | -- | -- |
| Real Estate | 1,230,380 | 1,230,380 | -- | -- |
| Telecommunication Services | 39,944,551 | -- | 39,944,551 | -- |
| Money Market Funds | 6,995,790 | 6,995,790 | -- | -- |
| Total Investments in Securities: | $405,579,899 | $307,180,531 | $98,399,368 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $300,425,826 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Japan Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $5,953,091) — See accompanying schedule:
Unaffiliated issuers (cost $353,862,189) | $398,584,109 | |
| Fidelity Central Funds (cost $6,995,387) | 6,995,790 | |
| Total Investments (cost $360,857,576) | | $405,579,899 |
| Receivable for investments sold | | 1,625,758 |
| Receivable for fund shares sold | | 1,020,188 |
| Dividends receivable | | 2,396,916 |
| Distributions receivable from Fidelity Central Funds | | 15,643 |
| Prepaid expenses | | 1,054 |
| Other receivables | | 700 |
| Total assets | | 410,640,158 |
| Liabilities | | |
| Payable for investments purchased | $401,493 | |
| Payable for fund shares redeemed | 489,133 | |
| Accrued management fee | 169,088 | |
| Distribution and service plan fees payable | 19,365 | |
| Other affiliated payables | 82,996 | |
| Other payables and accrued expenses | 71,758 | |
| Collateral on securities loaned, at value | 6,258,116 | |
| Total liabilities | | 7,491,949 |
| Net Assets | | $403,148,209 |
| Net Assets consist of: | | |
| Paid in capital | | $553,719,763 |
| Undistributed net investment income | | 3,364,219 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (198,564,073) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 44,628,300 |
| Net Assets | | $403,148,209 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($23,909,966 ÷ 1,899,417 shares) | | $12.59 |
| Maximum offering price per share (100/94.25 of $12.59) | | $13.36 |
| Class T: | | |
| Net Asset Value and redemption price per share ($4,192,527 ÷ 333,633 shares) | | $12.57 |
| Maximum offering price per share (100/96.50 of $12.57) | | $13.03 |
| Class C: | | |
| Net Asset Value and offering price per share ($15,076,897 ÷ 1,211,579 shares)(a) | | $12.44 |
| Japan: | | |
| Net Asset Value, offering price and redemption price per share ($352,936,346 ÷ 27,916,051 shares) | | $12.64 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($7,032,473 ÷ 557,040 shares) | | $12.62 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $7,837,925 |
| Income from Fidelity Central Funds | | 129,646 |
| Income before foreign taxes withheld | | 7,967,571 |
| Less foreign taxes withheld | | (785,680) |
| Total income | | 7,181,891 |
| Expenses | | |
| Management fee | | |
| Basic fee | $3,155,826 | |
| Performance adjustment | (931,093) | |
| Transfer agent fees | 880,448 | |
| Distribution and service plan fees | 252,555 | |
| Accounting and security lending fees | 234,932 | |
| Custodian fees and expenses | 49,872 | |
| Independent trustees' fees and expenses | 2,044 | |
| Registration fees | 81,205 | |
| Audit | 78,931 | |
| Legal | 1,537 | |
| Interest | 1,981 | |
| Miscellaneous | 3,993 | |
| Total expenses before reductions | 3,812,231 | |
| Expense reductions | (5,833) | 3,806,398 |
| Net investment income (loss) | | 3,375,493 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (20,161,579) | |
| Fidelity Central Funds | 1,060 | |
| Foreign currency transactions | 213,018 | |
| Total net realized gain (loss) | | (19,947,501) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 35,434,261 | |
| Assets and liabilities in foreign currencies | (75,691) | |
| Total change in net unrealized appreciation (depreciation) | | 35,358,570 |
| Net gain (loss) | | 15,411,069 |
| Net increase (decrease) in net assets resulting from operations | | $18,786,562 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $3,375,493 | $3,112,183 |
| Net realized gain (loss) | (19,947,501) | (392,382) |
| Change in net unrealized appreciation (depreciation) | 35,358,570 | 1,937,241 |
| Net increase (decrease) in net assets resulting from operations | 18,786,562 | 4,657,042 |
| Distributions to shareholders from net investment income | (3,027,093) | (3,310,432) |
| Distributions to shareholders from net realized gain | (270,338) | – |
| Total distributions | (3,297,431) | (3,310,432) |
| Share transactions - net increase (decrease) | (159,708,771) | 70,904,089 |
| Redemption fees | 43,507 | 139,156 |
| Total increase (decrease) in net assets | (144,176,133) | 72,389,855 |
| Net Assets | | |
| Beginning of period | 547,324,342 | 474,934,487 |
| End of period | $403,148,209 | $547,324,342 |
| Other Information | | |
| Undistributed net investment income end of period | $3,364,219 | $3,017,018 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.87 | $11.65 | $12.00 | $9.30 | $9.54 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .06 | .04 | .05 | .08 | .09 |
| Net realized and unrealized gain (loss) | .72 | .23 | (.31) | 2.80 | (.15) |
| Total from investment operations | .78 | .27 | (.26) | 2.88 | (.06) |
| Distributions from net investment income | (.05) | (.05) | (.08) | (.11) | (.13) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.06) | (.05) | (.09) | (.19) | (.18) |
| Redemption fees added to paid in capitalA | –B | –B | –B | .01 | –B |
| Net asset value, end of period | $12.59 | $11.87 | $11.65 | $12.00 | $9.30 |
| Total ReturnC,D | 6.56% | 2.31% | (2.18)% | 31.58% | (.64)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.08% | 1.10% | 1.23% | 1.26% | 1.42% |
| Expenses net of fee waivers, if any | 1.08% | 1.10% | 1.23% | 1.26% | 1.38% |
| Expenses net of all reductions | 1.08% | 1.09% | 1.23% | 1.25% | 1.36% |
| Net investment income (loss) | .51% | .37% | .41% | .75% | .94% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $23,910 | $23,918 | $21,352 | $20,520 | $9,495 |
| Portfolio turnover rateG | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.85 | $11.62 | $11.96 | $9.28 | $9.51 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .02 | –B | .01 | .05 | .06 |
| Net realized and unrealized gain (loss) | .71 | .23 | (.30) | 2.78 | (.13) |
| Total from investment operations | .73 | .23 | (.29) | 2.83 | (.07) |
| Distributions from net investment income | –B | – | (.04) | (.08) | (.11) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.01) | – | (.05) | (.16) | (.16) |
| Redemption fees added to paid in capitalA | –B | –B | –B | .01 | –B |
| Net asset value, end of period | $12.57 | $11.85 | $11.62 | $11.96 | $9.28 |
| Total ReturnC,D | 6.15% | 1.98% | (2.42)% | 31.04% | (.75)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.44% | 1.43% | 1.54% | 1.55% | 1.70% |
| Expenses net of fee waivers, if any | 1.44% | 1.43% | 1.54% | 1.55% | 1.66% |
| Expenses net of all reductions | 1.44% | 1.42% | 1.54% | 1.53% | 1.64% |
| Net investment income (loss) | .16% | .04% | .10% | .46% | .66% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $4,193 | $4,809 | $4,104 | $5,357 | $3,934 |
| Portfolio turnover rateG | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.77 | $11.58 | $11.96 | $9.25 | $9.48 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | (.02) | (.04) | (.03) | –B | .02 |
| Net realized and unrealized gain (loss) | .69 | .23 | (.32) | 2.79 | (.14) |
| Total from investment operations | .67 | .19 | (.35) | 2.79 | (.12) |
| Distributions from net investment income | – | – | (.03) | (.01) | (.06) |
| Distributions from net realized gain | – | – | (.01) | (.08) | (.05) |
| Total distributions | – | – | (.03)C | (.09) | (.11) |
| Redemption fees added to paid in capitalA | –B | –B | –B | .01 | –B |
| Net asset value, end of period | $12.44 | $11.77 | $11.58 | $11.96 | $9.25 |
| Total ReturnD,E | 5.69% | 1.64% | (2.90)% | 30.55% | (1.27)% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | 1.81% | 1.81% | 1.93% | 1.97% | 2.15% |
| Expenses net of fee waivers, if any | 1.81% | 1.81% | 1.93% | 1.97% | 2.11% |
| Expenses net of all reductions | 1.81% | 1.80% | 1.93% | 1.95% | 2.09% |
| Net investment income (loss) | (.21)% | (.34)% | (.29)% | .04% | .21% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $15,077 | $18,491 | $13,162 | $11,824 | $7,015 |
| Portfolio turnover rateH | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total distributions of $.03 per share is comprised of distributions from net investment income of $.025 and distributions from net realized gain of $.009 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.91 | $11.69 | $12.03 | $9.34 | $9.57 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .09 | .08 | .09 | .12 | .12 |
| Net realized and unrealized gain (loss) | .72 | .23 | (.32) | 2.79 | (.14) |
| Total from investment operations | .81 | .31 | (.23) | 2.91 | (.02) |
| Distributions from net investment income | (.07) | (.09) | (.11) | (.15) | (.16) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.08) | (.09) | (.11)B | (.23) | (.21) |
| Redemption fees added to paid in capitalA | –C | –C | –C | .01 | –C |
| Net asset value, end of period | $12.64 | $11.91 | $11.69 | $12.03 | $9.34 |
| Total ReturnD | 6.80% | 2.66% | (1.90)% | 31.92% | (.19)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .78% | .80% | .90% | .93% | 1.09% |
| Expenses net of fee waivers, if any | .78% | .80% | .90% | .93% | 1.06% |
| Expenses net of all reductions | .78% | .79% | .90% | .91% | 1.04% |
| Net investment income (loss) | .81% | .67% | .74% | 1.08% | 1.26% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $352,936 | $485,803 | $415,612 | $480,773 | $353,550 |
| Portfolio turnover rateG | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.11 per share is comprised of distributions from net investment income of $.105 and distributions from net realized gain of $.009 per share.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.89 | $11.67 | $12.02 | $9.33 | $9.57 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .10 | .08 | .09 | .13 | .12 |
| Net realized and unrealized gain (loss) | .70 | .23 | (.32) | 2.78 | (.14) |
| Total from investment operations | .80 | .31 | (.23) | 2.91 | (.02) |
| Distributions from net investment income | (.07) | (.09) | (.12) | (.15) | (.17) |
| Distributions from net realized gain | (.01) | – | (.01) | (.08) | (.05) |
| Total distributions | (.07)B | (.09) | (.12)C | (.23) | (.22) |
| Redemption fees added to paid in capitalA | –D | –D | –D | .01 | –D |
| Net asset value, end of period | $12.62 | $11.89 | $11.67 | $12.02 | $9.33 |
| Total ReturnE | 6.77% | 2.72% | (1.90)% | 32.04% | (.18)% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | .77% | .80% | .89% | .90% | 1.03% |
| Expenses net of fee waivers, if any | .77% | .80% | .89% | .90% | 1.01% |
| Expenses net of all reductions | .76% | .79% | .89% | .88% | .99% |
| Net investment income (loss) | .83% | .67% | .76% | 1.11% | 1.31% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $7,032 | $13,957 | $20,253 | $20,033 | $1,488 |
| Portfolio turnover rateH | 15% | 35% | 112% | 68% | 52% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.07 per share is comprised of distributions from net investment income of .065 and distributions from net realized gain of $.006 per share.
C Total distributions of $.12 per share is comprised of distributions from net investment income of $.115 and distributions from net realized gain of $.009 per share.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Japan Fund (the Fund) is a fund of Fidelity Investment 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, Japan and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. 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. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive-foreign investment companies (PFIC), expiring capital loss carryforwards, 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 | $62,245,810 |
| Gross unrealized depreciation | (22,000,840) |
| Net unrealized appreciation (depreciation) on securities | $40,244,970 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $4,358,745 |
| Capital loss carryforward | $(195,080,291) |
| Net unrealized appreciation (depreciation) on securities and other investments | $40,150,155 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(41,604,069) |
| 2018 | (26,887,863) |
| 2019 | (98,806,037) |
| Total with expiration | (167,297,969) |
| No expiration | |
| Short-term | (10,932,314) |
| Long-term | (16,850,008) |
| Total no expiration | (27,782,322) |
| Total capital loss carryforward | $(195,080,291) |
Due to large redemptions in a prior period, $141,955,883 of capital losses that will be available to offset future capital gains of the Fund will be limited to approximately $18,885,324 per year.
The Fund acquired $1,617,303 of its capital loss carryforward as part of a merger in a prior period. The losses acquired that will be available to offset future capital gains of the Fund will be limited to approximately $1,371,973 per year.
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $3,297,431 | $ 3,310,432 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $66,643,788 and $222,810,669, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Japan as compared to its benchmark index, the TOPIX, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .49% 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
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $64,315 | $15,057 |
| Class T | .25% | .25% | 22,238 | 73 |
| Class B | .75% | .25% | 1,473 | 1,107 |
| Class C | .75% | .25% | 164,529 | 50,712 |
| | | | $252,555 | $66,949 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $5,740 |
| Class T | 1,209 |
| Class B(a) | 48 |
| Class C(a) | 8,824 |
| | $15,821 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $61,063 | .24 |
| Class T | 15,235 | .34 |
| Class B | 416 | .29 |
| Class C | 35,044 | .21 |
| Japan | 755,481 | .19 |
| Class I | 13,209 | .17 |
| | $880,448 | |
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 $109 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $3,216,750 | .62% | $1,981 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,143 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $124,193. 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 $1,905 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $3,928.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $121,415 | $79,823 |
| Class T | 822 | – |
| Japan | 2,828,514 | 3,066,127 |
| Class I | 76,342 | 164,482 |
| Total | $3,027,093 | $3,310,432 |
| From net realized gain | | |
| Class A | $14,867 | $– |
| Class T | 2,466 | – |
| Japan | 245,958 | – |
| Class I | 7,047 | – |
| Total | $270,338 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 813,081 | 1,104,408 | $9,592,333 | $13,420,485 |
| Reinvestment of distributions | 10,746 | 6,565 | 128,096 | 74,452 |
| Shares redeemed | (938,856) | (929,216) | (10,914,042) | (10,724,499) |
| Net increase (decrease) | (115,029) | 181,757 | $(1,193,613) | $2,770,438 |
| Class T | | | | |
| Shares sold | 36,363 | 180,232 | $424,255 | $2,170,519 |
| Reinvestment of distributions | 269 | – | 3,216 | – |
| Shares redeemed | (108,870) | (127,640) | (1,266,529) | (1,490,023) |
| Net increase (decrease) | (72,238) | 52,592 | $(839,058) | $680,496 |
| Class B | | | | |
| Shares sold | 1,967 | 711 | $21,930 | $8,779 |
| Shares redeemed | (31,378) | (10,106) | (356,692) | (116,253) |
| Net increase (decrease) | (29,411) | (9,395) | $(334,762) | $(107,474) |
| Class C | | | | |
| Shares sold | 261,804 | 747,753 | $3,054,392 | $8,932,993 |
| Shares redeemed | (621,443) | (312,924) | (7,129,408) | (3,580,602) |
| Net increase (decrease) | (359,639) | 434,829 | $(4,075,016) | $5,352,391 |
| Japan | | | | |
| Shares sold | 4,048,778 | 18,408,352 | $48,328,822 | $225,875,166 |
| Reinvestment of distributions | 251,274 | 262,630 | 3,000,214 | 2,980,854 |
| Shares redeemed | (17,176,238) | (13,426,033) | (197,588,759) | (161,325,584) |
| Net increase (decrease) | (12,876,186) | 5,244,949 | $(146,259,723) | $67,530,436 |
| Class I | | | | |
| Shares sold | 323,014 | 1,688,546 | $3,826,994 | $20,578,143 |
| Reinvestment of distributions | 6,575 | 14,222 | 78,372 | 161,134 |
| Shares redeemed | (946,812) | (2,263,385) | (10,911,965) | (26,061,475) |
| Net increase (decrease) | (617,223) | (560,617) | $(7,006,599) | $(5,322,198) |
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.
At the end of the period, Strategic Advisers International Fund and Strategic Advisers International II Fund were the owners of record of approximately 18% and 19%, respectively, of the total outstanding shares of the Fund. Mutual Funds managed by the investment adviser or its affiliates were the owners of record, in the aggregate, of approximately 46% of the total outstanding shares of the Fund.
Fidelity® Japan Smaller Companies Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Japan Smaller Companies Fund | 15.44% | 14.82% | 3.42% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Japan Smaller Companies Fund on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the Russell/Nomura Mid-Small Cap™ Index performed over the same period.
| Period Ending Values |
| $13,995 | Fidelity® Japan Smaller Companies Fund |
| $13,464 | Russell/Nomura Mid-Small Cap™ Index |
Fidelity® Japan Smaller Companies Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager David Jenkins: For the year, the fund advanced 15.44%, versus the 6.99% return of its benchmark, the Russell/Nomura Mid-Small Cap Index. A strengthening yen bolstered the benchmark’s return in U.S. dollars, even as Japanese equities declined in local-currency terms. Strong security selection in nine of 11 sectors, notably consumer discretionary and consumer staples, pushed the fund ahead of the benchmark. Top individual contributors included consumer staples stocks Kotobuki Spirits and Rokko Butter. Kotobuki makes premium desserts and sweets. A strong reception for its new products and improvement to existing products enabled the company to raise prices, fueling better-than-expected revenue and earnings growth. Rokko Butter, a flavored cheese company, benefited as new higher-priced products sold well, resulting in massive earnings growth that drove the stock higher. We locked in gains and had all but eliminated Rokko from the portfolio by period end. By contrast, picks in materials and energy nicked relative performance. The biggest individual detractors, however, came from elsewhere. They included Shinksei Bank, a mid-size diversified financial institution with above-average exposure to consumer finance. The stock fell amid concern over the impact negative interest rates would have on the company’s bottom-line.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Japan Smaller Companies Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Japan | 97.9% |
| | United States of America* | 2.1% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Japan | 94.8% |
| | United States of America* | 5.2% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 97.9 | 94.8 |
| Short-Term Investments and Net Other Assets (Liabilities) | 2.1 | 5.2 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Elecom Co. Ltd. (Technology Hardware, Storage & Peripherals) | 2.4 | 2.0 |
| Daito Trust Construction Co. Ltd. (Real Estate Management & Development) | 2.3 | 2.0 |
| Nitori Holdings Co. Ltd. (Specialty Retail) | 2.2 | 1.8 |
| Amano Corp. (Electronic Equipment & Components) | 1.9 | 1.9 |
| ORIX Corp. (Diversified Financial Services) | 1.9 | 1.6 |
| Mitsubishi Shokuhin Co. Ltd. (Food & Staples Retailing) | 1.9 | 1.5 |
| Kuraray Co. Ltd. (Chemicals) | 1.8 | 1.6 |
| Tokio Marine Holdings, Inc. (Insurance) | 1.8 | 1.2 |
| A/S One Corp. (Health Care Providers & Services) | 1.8 | 1.5 |
| Daiichikosho Co. Ltd. (Media) | 1.8 | 1.8 |
| | 19.8 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Industrials | 22.7 | 23.1 |
| Consumer Discretionary | 19.1 | 19.6 |
| Consumer Staples | 11.0 | 11.6 |
| Information Technology | 10.2 | 9.4 |
| Financials | 9.4 | 9.0 |
| Materials | 8.2 | 7.2 |
| Health Care | 7.3 | 7.8 |
| Utilities | 3.6 | 3.6 |
| Real Estate | 2.8 | 0.0 |
| Energy | 2.0 | 2.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Japan Smaller Companies Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 97.9% | | | |
| | | Shares | Value |
| CONSUMER DISCRETIONARY - 19.1% | | | |
| Auto Components - 4.1% | | | |
| Bridgestone Corp. | | 256,000 | $9,556,975 |
| Hi-Lex Corp. | | 265,000 | 7,252,312 |
| Sumitomo Electric Industries Ltd. | | 470,000 | 6,966,864 |
| | | | 23,776,151 |
| Automobiles - 1.1% | | | |
| Fuji Heavy Industries Ltd. | | 169,000 | 6,597,559 |
| Distributors - 2.4% | | | |
| Central Automotive Products Ltd. | | 885,000 | 7,662,630 |
| Chori Co. Ltd. | | 406,100 | 6,443,696 |
| | | | 14,106,326 |
| Diversified Consumer Services - 1.2% | | | |
| Asante, Inc. | | 445,000 | 6,751,168 |
| Hotels, Restaurants & Leisure - 1.3% | | | |
| KOMEDA Holdings Co. Ltd. (a) | | 185,200 | 3,000,427 |
| Koshidaka Holdings Co. Ltd. | | 286,600 | 4,667,806 |
| | | | 7,668,233 |
| Media - 2.1% | | | |
| Daiichikosho Co. Ltd. | | 237,400 | 10,334,042 |
| Proto Corp. | | 174,000 | 1,974,445 |
| | | | 12,308,487 |
| Specialty Retail - 5.8% | | | |
| Arc Land Sakamoto Co. Ltd. | | 611,700 | 7,302,836 |
| Fuji Corp. | | 303,300 | 6,047,490 |
| Nitori Holdings Co. Ltd. | | 108,100 | 12,957,156 |
| VT Holdings Co. Ltd. | | 1,487,400 | 8,013,550 |
| | | | 34,321,032 |
| Textiles, Apparel & Luxury Goods - 1.1% | | | |
| Hagihara Industries, Inc. | | 276,400 | 6,491,591 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 112,020,547 |
|
| CONSUMER STAPLES - 11.0% | | | |
| Food & Staples Retailing - 4.4% | | | |
| Mitsubishi Shokuhin Co. Ltd. | | 334,600 | 11,007,628 |
| San-A Co. Ltd. | | 179,900 | 9,812,415 |
| Sogo Medical Co. Ltd. | | 170,700 | 5,208,735 |
| | | | 26,028,778 |
| Food Products - 5.1% | | | |
| Japan Meat Co. Ltd. | | 478,500 | 6,739,244 |
| Kotobuki Spirits Co. Ltd. | | 434,000 | 10,255,097 |
| Morinaga & Co. Ltd. | | 114,000 | 5,310,289 |
| Rokko Butter Co. Ltd. | | 500 | 13,464 |
| S Foods, Inc. (a) | | 276,300 | 7,403,481 |
| | | | 29,721,575 |
| Tobacco - 1.5% | | | |
| Japan Tobacco, Inc. | | 235,300 | 8,961,459 |
|
| TOTAL CONSUMER STAPLES | | | 64,711,812 |
|
| ENERGY - 2.0% | | | |
| Energy Equipment & Services - 1.0% | | | |
| Shinko Plantech Co. Ltd. | | 798,000 | 5,927,739 |
| Oil, Gas & Consumable Fuels - 1.0% | | | |
| San-Ai Oil Co. Ltd. | | 808,000 | 5,709,240 |
|
| TOTAL ENERGY | | | 11,636,979 |
|
| FINANCIALS - 9.4% | | | |
| Banks - 3.5% | | | |
| Fukuoka Financial Group, Inc. | | 1,688,000 | 7,323,734 |
| Mitsubishi UFJ Financial Group, Inc. | | 1,165,000 | 6,011,180 |
| Shinsei Bank Ltd. | | 4,382,000 | 7,103,461 |
| | | | 20,438,375 |
| Consumer Finance - 0.6% | | | |
| AEON Financial Service Co. Ltd. | | 205,000 | 3,618,337 |
| Diversified Financial Services - 3.5% | | | |
| Fuyo General Lease Co. Ltd. | | 186,000 | 9,453,419 |
| ORIX Corp. | | 715,300 | 11,360,085 |
| | | | 20,813,504 |
| Insurance - 1.8% | | | |
| Tokio Marine Holdings, Inc. | | 268,300 | 10,614,825 |
|
| TOTAL FINANCIALS | | | 55,485,041 |
|
| HEALTH CARE - 7.3% | | | |
| Health Care Equipment & Supplies - 2.4% | | | |
| Medikit Co. Ltd. | | 208,200 | 9,043,111 |
| Paramount Bed Holdings Co. Ltd. | | 138,900 | 5,297,988 |
| | | | 14,341,099 |
| Health Care Providers & Services - 3.4% | | | |
| A/S One Corp. | | 235,600 | 10,592,677 |
| Miraca Holdings, Inc. | | 187,800 | 9,097,206 |
| | | | 19,689,883 |
| Pharmaceuticals - 1.5% | | | |
| Astellas Pharma, Inc. | | 580,100 | 8,609,765 |
|
| TOTAL HEALTH CARE | | | 42,640,747 |
|
| INDUSTRIALS - 22.7% | | | |
| Air Freight & Logistics - 0.8% | | | |
| AIT Corp. | | 525,400 | 4,649,292 |
| Building Products - 2.9% | | | |
| Sekisui Jushi Corp. | | 568,200 | 9,373,377 |
| Sinko Industries Ltd. | | 607,300 | 7,626,720 |
| | | | 17,000,097 |
| Commercial Services & Supplies - 2.9% | | | |
| Aeon Delight Co. Ltd. | | 275,000 | 8,142,224 |
| ProNexus, Inc. | | 830,700 | 8,784,651 |
| | | | 16,926,875 |
| Construction & Engineering - 2.8% | | | |
| Hokuriku Electrical Construction Co. Ltd. | | 839,900 | 6,879,700 |
| Toshiba Plant Systems & Services Corp. | | 587,900 | 9,502,150 |
| | | | 16,381,850 |
| Electrical Equipment - 1.7% | | | |
| Aichi Electric Co. Ltd. | | 185,800 | 3,401,697 |
| Denyo Co. Ltd. | | 530,900 | 6,601,446 |
| | | | 10,003,143 |
| Machinery - 2.1% | | | |
| Daiwa Industries Ltd. | | 689,500 | 6,015,948 |
| NGK Insulators Ltd. | | 360,000 | 6,618,480 |
| | | | 12,634,428 |
| Marine - 0.7% | | | |
| Nippon Concept Corp. | | 479,000 | 4,229,560 |
| Professional Services - 2.9% | | | |
| Funai Soken Holdings, Inc. | | 405,020 | 6,272,075 |
| Meitec Corp. | | 79,100 | 2,700,277 |
| Yamada Consulting Group Co. Ltd. | | 186,300 | 7,869,829 |
| | | | 16,842,181 |
| Trading Companies & Distributors - 4.6% | | | |
| Inaba Denki Sangyo Co. Ltd. | | 223,600 | 8,134,204 |
| Mitani Shoji Co. Ltd. | | 243,900 | 7,279,556 |
| Trusco Nakayama Corp. | | 125,000 | 6,472,299 |
| Yuasa Trading Co. Ltd. | | 215,800 | 5,183,563 |
| | | | 27,069,622 |
| Transportation Infrastructure - 1.3% | | | |
| Kamigumi Co. Ltd. | | 903,000 | 7,723,763 |
|
| TOTAL INDUSTRIALS | | | 133,460,811 |
|
| INFORMATION TECHNOLOGY - 10.2% | | | |
| Electronic Equipment & Components - 2.6% | | | |
| Amano Corp. | | 616,900 | 11,500,329 |
| Dexerials Corp. | | 515,000 | 4,144,751 |
| | | | 15,645,080 |
| IT Services - 2.2% | | | |
| Otsuka Corp. | | 128,000 | 6,102,794 |
| TKC Corp. | | 232,800 | 6,892,762 |
| | | | 12,995,556 |
| Software - 3.0% | | | |
| Broadleaf Co. Ltd. | | 312,000 | 3,513,607 |
| Oracle Corp. Japan | | 111,600 | 6,087,079 |
| SRA Holdings, Inc. | | 336,500 | 7,970,497 |
| | | | 17,571,183 |
| Technology Hardware, Storage & Peripherals - 2.4% | | | |
| Elecom Co. Ltd. | | 677,900 | 13,891,551 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 60,103,370 |
|
| MATERIALS - 8.2% | | | |
| Chemicals - 8.2% | | | |
| C. Uyemura & Co. Ltd. | | 128,400 | 5,981,062 |
| Kuraray Co. Ltd. | | 705,400 | 10,721,919 |
| Lintec Corp. | | 437,700 | 9,557,862 |
| Mitsubishi Chemical Holdings Corp. | | 865,000 | 5,699,580 |
| Sakata INX Corp. | | 570,800 | 7,500,357 |
| SK Kaken Co. Ltd. | | 81,000 | 8,442,166 |
| | | | 47,902,946 |
| REAL ESTATE - 2.8% | | | |
| Real Estate Management & Development - 2.8% | | | |
| Century21 Real Estate Japan Ltd. | | 250,400 | 3,144,625 |
| Daito Trust Construction Co. Ltd. | | 78,600 | 13,172,452 |
| | | | 16,317,077 |
| TELECOMMUNICATION SERVICES - 1.6% | | | |
| Wireless Telecommunication Services - 1.6% | | | |
| KDDI Corp. | | 303,200 | 9,215,211 |
| UTILITIES - 3.6% | | | |
| Electric Utilities - 2.0% | | | |
| Hokuriku Electric Power Co., Inc. | | 375,900 | 4,276,234 |
| The Okinawa Electric Power Co., Inc. | | 316,875 | 7,345,505 |
| | | | 11,621,739 |
| Gas Utilities - 1.6% | | | |
| Tokyo Gas Co. Ltd. | | 2,161,000 | 9,812,799 |
|
| TOTAL UTILITIES | | | 21,434,538 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $464,091,254) | | | 574,929,079 |
|
| Money Market Funds - 1.9% | | | |
| Fidelity Cash Central Fund, 0.41% (b) | | 6,706,023 | 6,708,035 |
| Fidelity Securities Lending Cash Central Fund 0.48% (b)(c) | | 4,351,920 | 4,352,790 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $11,058,690) | | | 11,060,825 |
| TOTAL INVESTMENT PORTFOLIO - 99.8% | | | |
| (Cost $475,149,944) | | | 585,989,904 |
| NET OTHER ASSETS (LIABILITIES) - 0.2% | | | 1,044,229 |
| NET ASSETS - 100% | | | $587,034,133 |
Legend
(a) Security or a portion of the security is on loan at period end.
(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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(c) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $72,850 |
| Fidelity Securities Lending Cash Central Fund | 61,758 |
| Total | $134,608 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $112,020,547 | $112,020,547 | $-- | $-- |
| Consumer Staples | 64,711,812 | 64,711,812 | -- | -- |
| Energy | 11,636,979 | 11,636,979 | -- | -- |
| Financials | 55,485,041 | 49,473,861 | 6,011,180 | -- |
| Health Care | 42,640,747 | 34,030,982 | 8,609,765 | -- |
| Industrials | 133,460,811 | 133,460,811 | -- | -- |
| Information Technology | 60,103,370 | 60,103,370 | -- | -- |
| Materials | 47,902,946 | 47,902,946 | -- | -- |
| Real Estate | 16,317,077 | 16,317,077 | -- | -- |
| Telecommunication Services | 9,215,211 | -- | 9,215,211 | -- |
| Utilities | 21,434,538 | 21,434,538 | -- | -- |
| Money Market Funds | 11,060,825 | 11,060,825 | -- | -- |
| Total Investments in Securities: | $585,989,904 | $562,153,748 | $23,836,156 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $353,449,007 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Japan Smaller Companies Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $4,143,475) — See accompanying schedule:
Unaffiliated issuers (cost $464,091,254) | $574,929,079 | |
| Fidelity Central Funds (cost $11,058,690) | 11,060,825 | |
| Total Investments (cost $475,149,944) | | $585,989,904 |
| Foreign currency held at value (cost $40,311) | | 40,311 |
| Receivable for investments sold | | 3,760,196 |
| Receivable for fund shares sold | | 146,451 |
| Dividends receivable | | 4,162,664 |
| Distributions receivable from Fidelity Central Funds | | 13,416 |
| Prepaid expenses | | 1,505 |
| Other receivables | | 782 |
| Total assets | | 594,115,229 |
| Liabilities | | |
| Payable for investments purchased | $1,970,217 | |
| Payable for fund shares redeemed | 244,450 | |
| Accrued management fee | 335,309 | |
| Other affiliated payables | 110,706 | |
| Other payables and accrued expenses | 68,303 | |
| Collateral on securities loaned, at value | 4,352,111 | |
| Total liabilities | | 7,081,096 |
| Net Assets | | $587,034,133 |
| Net Assets consist of: | | |
| Paid in capital | | $477,324,749 |
| Undistributed net investment income | | 6,281,121 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (7,254,304) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 110,682,567 |
| Net Assets, for 37,482,283 shares outstanding | | $587,034,133 |
| Net Asset Value, offering price and redemption price per share ($587,034,133 ÷ 37,482,283 shares) | | $15.66 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $12,875,675 |
| Income from Fidelity Central Funds | | 134,608 |
| Income before foreign taxes withheld | | 13,010,283 |
| Less foreign taxes withheld | | (1,287,567) |
| Total income | | 11,722,716 |
| Expenses | | |
| Management fee | $3,810,929 | |
| Transfer agent fees | 1,008,103 | |
| Accounting and security lending fees | 279,062 | |
| Custodian fees and expenses | 68,740 | |
| Independent trustees' fees and expenses | 2,354 | |
| Registration fees | 25,994 | |
| Audit | 65,890 | |
| Legal | 1,568 | |
| Miscellaneous | 6,308 | |
| Total expenses before reductions | 5,268,948 | |
| Expense reductions | (3,889) | 5,265,059 |
| Net investment income (loss) | | 6,457,657 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 13,443,634 | |
| Fidelity Central Funds | 3,720 | |
| Foreign currency transactions | 489,972 | |
| Total net realized gain (loss) | | 13,937,326 |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 60,722,611 | |
| Assets and liabilities in foreign currencies | (140,005) | |
| Total change in net unrealized appreciation (depreciation) | | 60,582,606 |
| Net gain (loss) | | 74,519,932 |
| Net increase (decrease) in net assets resulting from operations | | $80,977,589 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $6,457,657 | $3,406,739 |
| Net realized gain (loss) | 13,937,326 | (13,284,472) |
| Change in net unrealized appreciation (depreciation) | 60,582,606 | 34,250,021 |
| Net increase (decrease) in net assets resulting from operations | 80,977,589 | 24,372,288 |
| Distributions to shareholders from net investment income | (3,361,556) | (991,819) |
| Distributions to shareholders from net realized gain | (3,952,599) | (5,888,929) |
| Total distributions | (7,314,155) | (6,880,748) |
| Share transactions | | |
| Proceeds from sales of shares | 106,869,419 | 181,245,784 |
| Reinvestment of distributions | 6,515,367 | 6,645,506 |
| Cost of shares redeemed | (102,939,703) | (118,682,976) |
| Net increase (decrease) in net assets resulting from share transactions | 10,445,083 | 69,208,314 |
| Redemption fees | 83,902 | 90,331 |
| Total increase (decrease) in net assets | 84,192,419 | 86,790,185 |
| Net Assets | | |
| Beginning of period | 502,841,714 | 416,051,529 |
| End of period | $587,034,133 | $502,841,714 |
| Other Information | | |
| Undistributed net investment income end of period | $6,281,121 | $3,344,679 |
| Shares | | |
| Sold | 7,750,747 | 13,218,734 |
| Issued in reinvestment of distributions | 472,128 | 539,846 |
| Redeemed | (7,291,814) | (8,966,998) |
| Net increase (decrease) | 931,061 | 4,791,582 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Japan Smaller Companies Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $13.76 | $13.10 | $13.86 | $9.12 | $8.62 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .17 | .10 | .09 | .02 | .06 |
| Net realized and unrealized gain (loss) | 1.93 | .78 | (.53) | 4.91 | .55 |
| Total from investment operations | 2.10 | .88 | (.44) | 4.93 | .61 |
| Distributions from net investment income | (.09) | (.03) | (.02) | (.07) | (.08) |
| Distributions from net realized gain | (.11) | (.19) | (.31) | (.15) | (.03) |
| Total distributions | (.20) | (.22) | (.33) | (.22) | (.11) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .03 | –B |
| Net asset value, end of period | $15.66 | $13.76 | $13.10 | $13.86 | $9.12 |
| Total ReturnC | 15.44% | 6.93% | (3.16)% | 55.79% | 7.13% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .96% | .98% | 1.00% | 1.01% | 1.05% |
| Expenses net of fee waivers, if any | .96% | .98% | 1.00% | 1.01% | 1.05% |
| Expenses net of all reductions | .96% | .97% | 1.00% | .98% | 1.02% |
| Net investment income (loss) | 1.18% | .77% | .70% | .18% | .67% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $587,034 | $502,842 | $416,052 | $661,445 | $237,893 |
| Portfolio turnover rateF | 30% | 41% | 112% | 91% | 86% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Japan Smaller Companies Fund (the Fund) is a fund of Fidelity Investment Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. 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. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), 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 | $107,955,055 |
| Gross unrealized depreciation | (11,575,084) |
| Net unrealized appreciation (depreciation) on securities | $96,379,971 |
| Tax Cost | $489,609,933 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $15,433,192 |
| Capital loss carryforward | $(1,945,816) |
| Net unrealized appreciation (depreciation) on securities and other investments | $96,222,025 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(1,945,816) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $7,314,155 | $ 991,819 |
| Long-term Capital Gains | – | 5,888,929 |
| Total | $7,314,155 | $ 6,880,748 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $172,503,692 and $155,555,487, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .18% of average net assets.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,390 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $61,758. 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 $192 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $17.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $3,680.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Strategic Advisers International Fund, VIP FundsManager 50% Portfolio, and VIP FundsManager 60% Portfolio were the owners of record of approximately 16%, 11%, and 11%, respectively of the total outstanding shares of the Fund. Mutual funds managed by the investment adviser or its affiliates were the owners of record, in the aggregate, of approximately 48% of the total outstanding shares of the Fund.
Fidelity® Latin America Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Latin America Fund | 26.65% | (8.03)% | (0.46)% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Latin America Fund, a class of the fund, on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI EM (Emerging Markets) Latin America Index performed over the same period.
| Period Ending Values |
| $9,550 | Fidelity® Latin America Fund |
| $13,217 | MSCI EM (Emerging Markets) Latin America Index |
Fidelity® Latin America Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Will Pruett: For the year, the fund’s share classes (excluding sales charges, if applicable) trailed the 33.71% return of the benchmark MSCI Emerging Markets Latin America Index by roughly 7 to 8 percentage points. Relative results were hampered by unfavorable positioning in Brazil, mainly within the strong-performing materials sector and among highly levered domestic cyclicals, including banks. Here, underweighting the strong-performing bank Banco Bradesco was the fund's biggest detractor by far, followed by a less-than-benchmark stake in state-owned oil giant Petroleo Brasieiro, also known as Petrobras. Conversely, stock picking in the consumer discretionary sector was beneficial, as were choices in the industrials sector’s capital goods group, although to a lesser extent. The fund’s top individual contributors were names I chose to underweight. America Movil, a Mexico-based telecommunications firm, returned -20% this period. Wal-Mart de Mexico was another notable contributor, as the stock also lost ground this period. I sold out of both names on valuation concerns in January when I took over the fund. Banco Bradesco was also sold by period end.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Note to shareholders: Will Pruett became sole Portfolio Manager of the fund on January 1, 2016, after having previously served as Co-Manager.
Fidelity® Latin America Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Brazil | 57.9% |
| | Mexico | 22.8% |
| | Bermuda | 4.8% |
| | Panama | 4.0% |
| | United States of America* | 2.6% |
| | Argentina | 2.1% |
| | United Kingdom | 2.0% |
| | France | 1.5% |
| | Peru | 1.2% |
| | Other | 1.1% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Brazil | 45.5% |
| | Mexico | 30.6% |
| | United States of America* | 8.4% |
| | Chile | 3.8% |
| | Bermuda | 3.7% |
| | Panama | 2.6% |
| | United Kingdom | 1.4% |
| | Spain | 1.0% |
| | Peru | 1.0% |
| | Other | 2.0% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.1 | 96.6 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.9 | 3.4 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Itau Unibanco Holding SA (Brazil, Banks) | 10.2 | 8.0 |
| Petroleo Brasileiro SA - Petrobras (PN) (non-vtg.) (Brazil, Oil, Gas & Consumable Fuels) | 6.5 | 2.3 |
| Ambev SA (Brazil, Beverages) | 6.1 | 0.0 |
| Grupo Financiero Banorte S.A.B. de CV Series O (Mexico, Banks) | 4.9 | 5.0 |
| Itausa-Investimentos Itau SA (PN) (Brazil, Banks) | 4.5 | 3.5 |
| Cielo SA (Brazil, IT Services) | 3.7 | 3.9 |
| Credicorp Ltd. (United States) (Bermuda, Banks) | 3.6 | 3.7 |
| Kroton Educacional SA (Brazil, Diversified Consumer Services) | 3.5 | 2.6 |
| BB Seguridade Participacoes SA (Brazil, Insurance) | 2.8 | 2.5 |
| Smiles SA (Brazil, Media) | 2.7 | 1.8 |
| | 48.5 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Financials | 39.2 | 35.2 |
| Consumer Discretionary | 17.3 | 14.5 |
| Consumer Staples | 13.3 | 16.4 |
| Industrials | 9.4 | 10.2 |
| Energy | 6.5 | 2.3 |
| Information Technology | 4.9 | 5.9 |
| Health Care | 4.3 | 6.2 |
| Utilities | 1.9 | 1.5 |
| Materials | 1.2 | 3.6 |
| Real Estate | 1.1 | 0.0 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Latin American market. As of October 31, 2016, 26.9% of the Fund’s total assets were invested in the Diversified Banks industry, which accounts for more than 20% of the Latin American market.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Latin America Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 76.7% | | | |
| | | Shares | Value |
| Argentina - 2.1% | | | |
| Grupo Financiero Galicia SA sponsored ADR | | 202,608 | $6,309,213 |
| Grupo Superveille SA sponsored ADR (a) | | 475,000 | 7,210,500 |
|
| TOTAL ARGENTINA | | | 13,519,713 |
|
| Bermuda - 4.8% | | | |
| Credicorp Ltd. (United States) | | 151,821 | 22,572,746 |
| PAX Global Technology Ltd. (a) | | 12,476,240 | 7,802,124 |
|
| TOTAL BERMUDA | | | 30,374,870 |
|
| Brazil - 35.5% | | | |
| Ambev SA | | 6,567,532 | 38,742,678 |
| BB Seguridade Participacoes SA | | 1,762,780 | 17,749,295 |
| Cielo SA | | 2,277,207 | 23,114,507 |
| CVC Brasil Operadora e Agencia de Viagens SA | | 1,814,733 | 13,928,872 |
| Equatorial Energia SA | | 668,406 | 11,923,257 |
| Estacio Participacoes SA | | 2,421,505 | 14,041,998 |
| FPC Par Corretora de Seguros | | 1,809,373 | 8,553,709 |
| Grendene SA | | 1,679,603 | 10,323,876 |
| Kroton Educacional SA | | 4,457,759 | 22,205,003 |
| MAHLE Metal Leve SA | | 1,138,576 | 7,893,699 |
| Multiplus SA | | 796,822 | 10,804,028 |
| Qualicorp SA | | 2,460,713 | 15,834,287 |
| Smiles SA | | 930,784 | 16,988,558 |
| Tegma Gestao Logistica SA (b) | | 2,562,627 | 6,454,737 |
| Valid Solucoes SA | | 659,175 | 6,176,668 |
|
| TOTAL BRAZIL | | | 224,735,172 |
|
| Chile - 1.1% | | | |
| Vina San Pedro SA | | 574,573,084 | 6,649,785 |
| France - 1.5% | | | |
| Edenred SA | | 419,118 | 9,710,132 |
| Mexico - 22.8% | | | |
| Compartamos S.A.B. de CV | | 7,444,573 | 14,691,422 |
| Credito Real S.A.B. de CV | | 4,204,186 | 7,722,837 |
| Genomma Lab Internacional SA de CV (b) | | 9,725,099 | 11,633,484 |
| Gruma S.A.B. de CV Series B | | 751,554 | 10,427,757 |
| Grupo Aeroportuario Norte S.A.B. de CV | | 1,138,679 | 6,625,074 |
| Grupo Financiero Banorte S.A.B. de CV Series O | | 5,233,321 | 30,819,584 |
| Grupo GICSA SA de CV (b) | | 10,205,012 | 6,900,167 |
| Kimberly-Clark de Mexico SA de CV Series A | | 7,148,566 | 15,415,880 |
| Megacable Holdings S.A.B. de CV unit | | 1,796,523 | 6,531,774 |
| Promotora y Operadora de Infraestructura S.A.B. de CV | | 1,551,159 | 14,607,205 |
| Qualitas Controladora S.A.B. de CV | | 4,954,982 | 9,091,518 |
| Unifin Financiera SAPI de CV | | 3,407,489 | 10,160,631 |
|
| TOTAL MEXICO | | | 144,627,333 |
|
| Panama - 4.0% | | | |
| Copa Holdings SA Class A | | 171,117 | 15,782,121 |
| Intergroup Financial Services Corp. | | 314,911 | 9,825,223 |
|
| TOTAL PANAMA | | | 25,607,344 |
|
| Peru - 1.2% | | | |
| Cementos Pacasmayo SAA | | 3,812,245 | 7,367,205 |
| United Kingdom - 2.0% | | | |
| British American Tobacco PLC (United Kingdom) | | 221,491 | 12,694,302 |
| United States of America - 1.7% | | | |
| First Cash Financial Services, Inc. | | 221,675 | 10,463,060 |
| TOTAL COMMON STOCKS | | | |
| (Cost $389,289,536) | | | 485,748,916 |
|
| Nonconvertible Preferred Stocks - 22.4% | | | |
| Brazil - 22.4% | | | |
| Alpargatas SA (PN) | | 2,325,383 | 7,729,422 |
| Itau Unibanco Holding SA | | 5,389,489 | 64,835,957 |
| Itausa-Investimentos Itau SA (PN) | | 9,677,029 | 28,618,783 |
| Petroleo Brasileiro SA - Petrobras (PN) (non-vtg.) (b) | | 7,364,950 | 40,816,405 |
| TOTAL NONCONVERTIBLE PREFERRED STOCKS | | | |
| (Cost $73,702,351) | | | 142,000,567 |
|
| Money Market Funds - 1.7% | | | |
| Fidelity Cash Central Fund, 0.41% (c) | | 7,696,911 | 7,699,220 |
| Fidelity Securities Lending Cash Central Fund 0.48% (c)(d) | | 3,078,421 | 3,079,036 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $10,775,455) | | | 10,778,256 |
| TOTAL INVESTMENT PORTFOLIO - 100.8% | | | |
| (Cost $473,767,342) | | | 638,527,739 |
| NET OTHER ASSETS (LIABILITIES) - (0.8)% | | | (5,106,372) |
| NET ASSETS - 100% | | | $633,421,367 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $40,904 |
| Fidelity Securities Lending Cash Central Fund | 53,768 |
| Total | $94,672 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $110,447,230 | $110,447,230 | $-- | $-- |
| Consumer Staples | 83,930,402 | 71,236,100 | 12,694,302 | -- |
| Energy | 40,816,405 | 40,816,405 | -- | -- |
| Financials | 248,624,478 | 248,624,478 | -- | -- |
| Health Care | 27,467,771 | 27,467,771 | -- | -- |
| Industrials | 59,355,937 | 59,355,937 | -- | -- |
| Information Technology | 30,916,631 | 30,916,631 | -- | -- |
| Materials | 7,367,205 | 7,367,205 | -- | -- |
| Real Estate | 6,900,167 | 6,900,167 | -- | -- |
| Utilities | 11,923,257 | 11,923,257 | -- | -- |
| Money Market Funds | 10,778,256 | 10,778,256 | -- | -- |
| Total Investments in Securities: | $638,527,739 | $625,833,437 | $12,694,302 | $-- |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Latin America Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $2,884,288) — See accompanying schedule:
Unaffiliated issuers (cost $462,991,887) | $627,749,483 | |
| Fidelity Central Funds (cost $10,775,455) | 10,778,256 | |
| Total Investments (cost $473,767,342) | | $638,527,739 |
| Receivable for investments sold | | 1,428,891 |
| Receivable for fund shares sold | | 764,699 |
| Dividends receivable | | 542,971 |
| Distributions receivable from Fidelity Central Funds | | 14,678 |
| Prepaid expenses | | 1,486 |
| Other receivables | | 1,645 |
| Total assets | | 641,282,109 |
| Liabilities | | |
| Payable for investments purchased | $3,505,497 | |
| Payable for fund shares redeemed | 604,756 | |
| Accrued management fee | 361,441 | |
| Distribution and service plan fees payable | 12,339 | |
| Other affiliated payables | 162,441 | |
| Other payables and accrued expenses | 135,768 | |
| Collateral on securities loaned, at value | 3,078,500 | |
| Total liabilities | | 7,860,742 |
| Net Assets | | $633,421,367 |
| Net Assets consist of: | | |
| Paid in capital | | $636,343,447 |
| Undistributed net investment income | | 7,710,475 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (175,411,098) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 164,778,543 |
| Net Assets | | $633,421,367 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($19,114,774 ÷ 851,405 shares) | | $22.45 |
| Maximum offering price per share (100/94.25 of $22.45) | | $23.82 |
| Class T: | | |
| Net Asset Value and redemption price per share ($7,377,589 ÷ 328,319 shares) | | $22.47 |
| Maximum offering price per share (100/96.50 of $22.47) | | $23.28 |
| Class C: | | |
| Net Asset Value and offering price per share ($6,589,974 ÷ 291,411 shares)(a) | | $22.61 |
| Latin America: | | |
| Net Asset Value, offering price and redemption price per share ($596,514,428 ÷ 26,613,893 shares) | | $22.41 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($3,824,602 ÷ 170,776 shares) | | $22.40 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $19,138,493 |
| Income from Fidelity Central Funds | | 94,672 |
| Income before foreign taxes withheld | | 19,233,165 |
| Less foreign taxes withheld | | (910,667) |
| Total income | | 18,322,498 |
| Expenses | | |
| Management fee | $3,611,588 | |
| Transfer agent fees | 1,507,375 | |
| Distribution and service plan fees | 124,708 | |
| Accounting and security lending fees | 264,748 | |
| Custodian fees and expenses | 346,298 | |
| Independent trustees' fees and expenses | 2,289 | |
| Registration fees | 83,027 | |
| Audit | 79,297 | |
| Legal | 1,567 | |
| Interest | 882 | |
| Miscellaneous | 5,010 | |
| Total expenses before reductions | 6,026,789 | |
| Expense reductions | (33,716) | 5,993,073 |
| Net investment income (loss) | | 12,329,425 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (87,561,727) | |
| Fidelity Central Funds | 1,234 | |
| Foreign currency transactions | (422,119) | |
| Total net realized gain (loss) | | (87,982,612) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 203,504,980 | |
| Assets and liabilities in foreign currencies | 57,819 | |
| Total change in net unrealized appreciation (depreciation) | | 203,562,799 |
| Net gain (loss) | | 115,580,187 |
| Net increase (decrease) in net assets resulting from operations | | $127,909,612 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $12,329,425 | $10,341,112 |
| Net realized gain (loss) | (87,982,612) | (87,419,393) |
| Change in net unrealized appreciation (depreciation) | 203,562,799 | (231,042,995) |
| Net increase (decrease) in net assets resulting from operations | 127,909,612 | (308,121,276) |
| Distributions to shareholders from net investment income | (10,264,003) | (12,592,762) |
| Distributions to shareholders from net realized gain | – | (66,395,306) |
| Total distributions | (10,264,003) | (78,988,068) |
| Share transactions - net increase (decrease) | 5,109,952 | (98,503,600) |
| Redemption fees | 103,536 | 127,133 |
| Total increase (decrease) in net assets | 122,859,097 | (485,485,811) |
| Net Assets | | |
| Beginning of period | 510,562,270 | 996,048,081 |
| End of period | $633,421,367 | $510,562,270 |
| Other Information | | |
| Undistributed net investment income end of period | $7,710,475 | $7,012,875 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class A
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.09 | $30.31 | $40.71 | $48.95 | $52.38 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .40 | .28 | .49 | .72 | .92 |
| Net realized and unrealized gain (loss) | 4.27 | (10.11) | (4.08) | (4.73) | (3.66) |
| Total from investment operations | 4.67 | (9.83) | (3.59) | (4.01) | (2.74) |
| Distributions from net investment income | (.31) | (.31) | (.57) | (.79) | (.70) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.31) | (2.39) | (6.82) | (4.24) | (.70) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.45 | $18.09 | $30.31 | $40.71 | $48.95 |
| Total ReturnC,D | 26.29% | (34.60)% | (9.06)% | (8.93)% | (5.23)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.40% | 1.40% | 1.38% | 1.37% | 1.35% |
| Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.38% | 1.37% | 1.35% |
| Expenses net of all reductions | 1.39% | 1.39% | 1.38% | 1.35% | 1.35% |
| Net investment income (loss) | 2.14% | 1.26% | 1.52% | 1.66% | 1.80% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $19,115 | $16,424 | $34,898 | $48,464 | $69,654 |
| Portfolio turnover rateG | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class T
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.11 | $30.33 | $40.68 | $48.88 | $52.27 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .35 | .22 | .40 | .61 | .78 |
| Net realized and unrealized gain (loss) | 4.27 | (10.13) | (4.08) | (4.74) | (3.65) |
| Total from investment operations | 4.62 | (9.91) | (3.68) | (4.13) | (2.87) |
| Distributions from net investment income | (.26) | (.23) | (.43) | (.63) | (.53) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.26) | (2.31) | (6.68) | (4.08) | (.53) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.47 | $18.11 | $30.33 | $40.68 | $48.88 |
| Total ReturnC,D | 25.93% | (34.78)% | (9.30)% | (9.17)% | (5.49)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.68% | 1.67% | 1.65% | 1.63% | 1.61% |
| Expenses net of fee waivers, if any | 1.68% | 1.67% | 1.65% | 1.63% | 1.61% |
| Expenses net of all reductions | 1.68% | 1.66% | 1.65% | 1.61% | 1.61% |
| Net investment income (loss) | 1.86% | .99% | 1.25% | 1.40% | 1.54% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $7,378 | $5,284 | $9,761 | $12,705 | $19,334 |
| Portfolio turnover rateG | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class C
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.18 | $30.37 | $40.59 | $48.73 | $52.05 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .26 | .11 | .25 | .40 | .54 |
| Net realized and unrealized gain (loss) | 4.30 | (10.17) | (4.07) | (4.74) | (3.64) |
| Total from investment operations | 4.56 | (10.06) | (3.82) | (4.34) | (3.10) |
| Distributions from net investment income | (.13) | (.05) | (.16) | (.36) | (.23) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.13) | (2.13) | (6.41) | (3.81) | (.23) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.61 | $18.18 | $30.37 | $40.59 | $48.73 |
| Total ReturnC,D | 25.31% | (35.08)% | (9.74)% | (9.62)% | (5.94)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 2.15% | 2.15% | 2.13% | 2.12% | 2.10% |
| Expenses net of fee waivers, if any | 2.14% | 2.15% | 2.13% | 2.12% | 2.10% |
| Expenses net of all reductions | 2.14% | 2.15% | 2.13% | 2.10% | 2.10% |
| Net investment income (loss) | 1.39% | .51% | .77% | .91% | 1.06% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $6,590 | $5,394 | $11,349 | $15,185 | $27,405 |
| Portfolio turnover rateG | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.08 | $30.34 | $40.80 | $49.09 | $52.48 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .45 | .34 | .59 | .87 | 1.09 |
| Net realized and unrealized gain (loss) | 4.26 | (10.11) | (4.10) | (4.74) | (3.67) |
| Total from investment operations | 4.71 | (9.77) | (3.51) | (3.87) | (2.58) |
| Distributions from net investment income | (.38) | (.41) | (.71) | (.98) | (.82) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.38) | (2.49) | (6.96) | (4.43) | (.82) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.41 | $18.08 | $30.34 | $40.80 | $49.09 |
| Total ReturnC | 26.65% | (34.45)% | (8.79)% | (8.63)% | (4.91)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.14% | 1.13% | 1.08% | 1.04% | 1.02% |
| Expenses net of fee waivers, if any | 1.14% | 1.12% | 1.08% | 1.04% | 1.02% |
| Expenses net of all reductions | 1.13% | 1.12% | 1.07% | 1.03% | 1.02% |
| Net investment income (loss) | 2.40% | 1.53% | 1.83% | 1.99% | 2.14% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $596,514 | $481,005 | $933,298 | $1,324,748 | $2,274,601 |
| Portfolio turnover rateF | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Latin America Fund Class I
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.08 | $30.35 | $40.79 | $49.07 | $52.51 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .46 | .36 | .60 | .87 | 1.08 |
| Net realized and unrealized gain (loss) | 4.26 | (10.13) | (4.07) | (4.74) | (3.67) |
| Total from investment operations | 4.72 | (9.77) | (3.47) | (3.87) | (2.59) |
| Distributions from net investment income | (.40) | (.42) | (.73) | (.97) | (.86) |
| Distributions from net realized gain | – | (2.08) | (6.25) | (3.45) | – |
| Total distributions | (.40) | (2.50) | (6.98) | (4.42) | (.86) |
| Redemption fees added to paid in capitalA | –B | –B | .01 | .01 | .01 |
| Net asset value, end of period | $22.40 | $18.08 | $30.35 | $40.79 | $49.07 |
| Total ReturnC | 26.77% | (34.42)% | (8.69)% | (8.63)% | (4.93)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | 1.07% | 1.06% | 1.04% | 1.03% | 1.04% |
| Expenses net of fee waivers, if any | 1.07% | 1.06% | 1.04% | 1.03% | 1.04% |
| Expenses net of all reductions | 1.06% | 1.05% | 1.04% | 1.01% | 1.04% |
| Net investment income (loss) | 2.47% | 1.60% | 1.86% | 2.00% | 2.12% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $3,825 | $1,828 | $4,531 | $5,131 | $7,928 |
| Portfolio turnover rateF | 108% | 30% | 30% | 23% | 23% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.005 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Latin America Fund (the Fund) is a non-diversified fund of Fidelity Investment 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, Latin America and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period November 1, 2015 through June 24, 2016.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards, deferred trustees compensation, 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 | $173,272,430 |
| Gross unrealized depreciation | (11,656,235) |
| Net unrealized appreciation (depreciation) on securities | $161,616,195 |
| Tax Cost | $476,911,544 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $7,709,003 |
| Capital loss carryforward | $(172,266,895) |
| Net unrealized appreciation (depreciation) on securities and other investments | $161,636,251 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(44,509,664) |
| Long-term | (127,757,231) |
| Total capital loss carryforward | $(172,266,895) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $10,264,003 | $ 13,610,992 |
| Long-term Capital Gains | – | 65,377,076 |
| Total | $10,264,003 | $ 78,988,068 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $564,954,966 and $549,686,328, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| | Distribution
Fee | Service
Fee | Total Fees | Retained
by FDC |
| Class A | -% | .25% | $39,659 | $– |
| Class T | .25% | .25% | 28,255 | – |
| Class B | .75% | .25% | 2,961 | 2,221 |
| Class C | .75% | .25% | 53,833 | 5,002 |
| | | | $124,708 | $7,223 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained
by FDC |
| Class A | $6,559 |
| Class T | 4,271 |
| Class B(a) | 48 |
| Class C(a) | 583 |
| | $11,461 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| | Amount | % of
Class-Level Average
Net Assets |
| Class A | $48,105 | .30 |
| Class T | 19,103 | .34 |
| Class B | 821 | .28 |
| Class C | 16,255 | .30 |
| Latin America | 1,416,462 | .29 |
| Class I | 6,629 | .22 |
| | $1,507,375 | |
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 $7,154 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $7,287,286 | .62% | $882 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,313 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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 $53,768, including $303 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 $30,351 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $3,365.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| From net investment income | | |
| Class A | $264,922 | $341,444 |
| Class T | 74,433 | 71,167 |
| Class B | 1,059 | – |
| Class C | 37,419 | 18,114 |
| Latin America | 9,833,214 | 12,109,807 |
| Class I | 52,956 | 52,230 |
| Total | $10,264,003 | $12,592,762 |
| From net realized gain | | |
| Class A | $– | $2,330,553 |
| Class T | – | 658,521 |
| Class B | – | 144,042 |
| Class C | – | 754,025 |
| Latin America | – | 62,251,897 |
| Class I | – | 256,268 |
| Total | $– | $66,395,306 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended
October 31, 2016 | Year ended October 31, 2015 | Year ended
October 31, 2016 | Year ended October 31, 2015 |
| Class A | | | | |
| Shares sold | 225,272 | 218,330 | $4,334,307 | $4,910,163 |
| Reinvestment of distributions | 14,810 | 103,775 | 256,538 | 2,587,573 |
| Shares redeemed | (296,685) | (565,352) | (5,448,405) | (12,518,797) |
| Net increase (decrease) | (56,603) | (243,247) | $(857,560) | $(5,021,061) |
| Class T | | | | |
| Shares sold | 88,506 | 29,946 | $1,738,665 | $658,518 |
| Reinvestment of distributions | 4,243 | 28,508 | 73,689 | 713,357 |
| Shares redeemed | (56,211) | (88,493) | (1,058,502) | (1,990,592) |
| Net increase (decrease) | 36,538 | (30,039) | $753,852 | $(618,717) |
| Class B | | | | |
| Shares sold | 1 | 116 | $10 | $2,989 |
| Reinvestment of distributions | 59 | 5,261 | 1,009 | 133,376 |
| Shares redeemed | (34,427) | (43,584) | (635,494) | (982,322) |
| Net increase (decrease) | (34,367) | (38,207) | $(634,475) | $(845,957) |
| Class C | | | | |
| Shares sold | 75,193 | 48,350 | $1,418,728 | $1,099,271 |
| Reinvestment of distributions | 1,720 | 25,875 | 30,044 | 652,617 |
| Shares redeemed | (82,272) | (151,109) | (1,513,384) | (3,411,105) |
| Net increase (decrease) | (5,359) | (76,884) | $(64,612) | $(1,659,217) |
| Latin America | | | | |
| Shares sold | 5,528,011 | 2,736,036 | $106,883,642 | $60,647,605 |
| Reinvestment of distributions | 545,601 | 2,862,287 | 9,420,593 | 71,197,829 |
| Shares redeemed | (6,058,036) | (9,758,242) | (111,613,300) | (221,025,945) |
| Net increase (decrease) | 15,576 | (4,159,919) | $4,690,935 | $(89,180,511) |
| Class I | | | | |
| Shares sold | 136,401 | 41,136 | $2,463,122 | $906,993 |
| Reinvestment of distributions | 2,787 | 11,139 | 48,070 | 276,862 |
| Shares redeemed | (69,501) | (100,491) | (1,289,380) | (2,361,992) |
| Net increase (decrease) | 69,687 | (48,216) | $1,221,812 | $(1,178,137) |
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.
Fidelity® Nordic Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Nordic Fund | 1.97% | 11.42% | 5.28% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Nordic Fund on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the FTSE® Capped Nordic Index performed over the same period. Returns shown for the FTSE Capped Nordic Index for periods prior to October 1, 2009 (it's inception date) are returns of the uncapped FTSE Nordic Index.
| Period Ending Values |
| $16,722 | Fidelity® Nordic Fund |
| $15,351 | FTSE® Capped Nordic Index |
Fidelity® Nordic Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager Stefan Lindblad: For the one-year period ending October 31, 2016, the fund gained 1.97%, well ahead of the -3.99% result of the fund’s benchmark FTSE Capped Nordic Index. An emphasis on stock selection drove the fund’s outperformance relative to the benchmark, especially in the consumer services group within the consumer discretionary sector; results were offset somewhat by an unfavorable overweighting in the retailing segment. The fund’s biggest individual contributor was an out-of-index stake in Kambi Group, a Malta-based company that provides sports-betting infrastructure to Europe’s gaming industry. As the company’s revenues rose, so did its stock price. Elsewhere, underweighting Novo Nordisk, a poor-performing index heavyweight in the health care sector, was another win. The greater focus on drug costs and cost savings in the U.S. put increased pressure on drug companies like Denmark-based Novo Nordisk. Conversely, a combination of stock picking and a sizable underweighting in the industrial sector's capital goods segment detracted, with the most significant relative detractor being Sweden-based Eltel, a non-index company that provides infrastructure network services. After a material profit warning, shares plummeted and I sold the position at a loss. Also, Swedish medical tech company Getinge’s business restructuring took longer than expected, hurting the fund's holdings in the stock.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Nordic Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Sweden | 50.5% |
| | Finland | 13.8% |
| | Denmark | 13.4% |
| | Norway | 9.1% |
| | Malta | 8.3% |
| | United States of America* | 2.8% |
| | Bermuda | 2.1% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Sweden | 48.1% |
| | Denmark | 22.6% |
| | Finland | 11.8% |
| | Malta | 8.4% |
| | Norway | 4.1% |
| | United States of America* | 3.7% |
| | Bermuda | 1.3% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 97.2 | 96.3 |
| Short-Term Investments and Net Other Assets (Liabilities) | 2.8 | 3.7 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Svenska Cellulosa AB (SCA) (B Shares) (Sweden, Household Products) | 6.5 | 5.1 |
| Kambi Group PLC (Malta, Hotels, Restaurants & Leisure) | 4.7 | 4.9 |
| Bravida AB (Sweden, Commercial Services & Supplies) | 4.3 | 3.2 |
| Svenska Handelsbanken AB (A Shares) (Sweden, Banks) | 4.0 | 3.1 |
| Getinge AB (B Shares) (Sweden, Health Care Equipment & Supplies) | 3.7 | 3.4 |
| Valmet Corp. (Finland, Machinery) | 3.7 | 2.7 |
| Investor AB (B Shares) (Sweden, Diversified Financial Services) | 3.6 | 0.0 |
| Vaisala Oyj (Finland, Electronic Equipment & Components) | 3.6 | 2.0 |
| Dometic Group AB (Sweden, Auto Components) | 3.6 | 0.0 |
| Unibet Group PLC unit (Malta, Hotels, Restaurants & Leisure) | 3.6 | 3.5 |
| | 41.3 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Consumer Discretionary | 23.8 | 22.9 |
| Financials | 20.1 | 15.4 |
| Industrials | 18.5 | 22.0 |
| Consumer Staples | 14.2 | 13.4 |
| Health Care | 8.7 | 15.3 |
| Information Technology | 6.8 | 4.8 |
| Real Estate | 3.6 | 0.0 |
| Energy | 0.8 | 0.8 |
| Utilities | 0.7 | 0.0 |
| Materials | 0.0 | 1.7 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Market Sectors may include more than one industry category.
The Fund may invest up to 35% of its total assets in any industry that represents more than 20% of the Nordic market. As of October 31, 2016, the Fund did not have more than 25% of its total assets invested in any one industry.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Nordic Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 97.2% | | | |
| | | Shares | Value |
| Bermuda - 2.1% | | | |
| Vostok Emerging Finance Ltd. (depository receipt) (a) | | 9,489,995 | $1,555,022 |
| Vostok New Ventures Ltd. SDR (a) | | 1,004,054 | 7,531,392 |
|
| TOTAL BERMUDA | | | 9,086,414 |
|
| Denmark - 13.4% | | | |
| Alm. Brand A/S | | 1,265,654 | 9,526,307 |
| DONG Energy A/S | | 80,238 | 3,181,905 |
| Jyske Bank A/S (Reg.) | | 107,400 | 4,874,037 |
| Nets A/S (b) | | 707,500 | 13,511,393 |
| NNIT A/S | | 138,748 | 4,126,114 |
| Novo Nordisk A/S Series B | | 384,005 | 13,680,374 |
| Scandinavian Tobacco Group A/S | | 494,105 | 8,553,753 |
|
| TOTAL DENMARK | | | 57,453,883 |
|
| Finland - 13.8% | | | |
| Cramo Oyj (B Shares) | | 365,000 | 9,596,256 |
| Olvi PLC (A Shares) | | 326,046 | 9,874,930 |
| Raisio Group PLC (V Shares) | | 2,002,000 | 8,373,220 |
| Vaisala Oyj | | 455,400 | 15,492,377 |
| Valmet Corp. | | 1,062,585 | 15,782,105 |
|
| TOTAL FINLAND | | | 59,118,888 |
|
| Malta - 8.3% | | | |
| Kambi Group PLC (a)(c) | | 1,373,411 | 20,413,791 |
| Unibet Group PLC unit | | 1,745,298 | 15,400,569 |
|
| TOTAL MALTA | | | 35,814,360 |
|
| Norway - 9.1% | | | |
| Marine Harvest ASA | | 813,800 | 14,767,446 |
| Schibsted ASA: | | | |
| (A Shares) | | 319,100 | 7,650,815 |
| (B Shares) | | 291,854 | 6,570,146 |
| TGS Nopec Geophysical Co. ASA | | 159,098 | 3,225,343 |
| Zalaris ASA (A Shares) (d) | | 1,912,400 | 7,059,517 |
|
| TOTAL NORWAY | | | 39,273,267 |
|
| Sweden - 50.5% | | | |
| Addlife AB (a) | | 227,375 | 3,511,768 |
| AddTech AB (B Shares) | | 667,000 | 9,489,380 |
| AF AB (B Shares) | | 500,100 | 9,163,549 |
| Bravida AB | | 2,989,800 | 18,371,473 |
| Coor Service Management Holding AB | | 711,900 | 4,137,968 |
| Dometic Group AB | | 2,180,500 | 15,426,443 |
| Dustin Group AB (c) | | 1,087,188 | 7,402,674 |
| East Capital Explorer AB (d) | | 1,420,992 | 9,439,560 |
| Getinge AB (B Shares) | | 968,000 | 15,861,561 |
| Hemfosa Fastigheter AB | | 1,624,989 | 15,292,490 |
| Industrivarden AB (C Shares) | | 527,700 | 9,418,050 |
| Investor AB (B Shares) | | 437,310 | 15,546,713 |
| Mekonomen AB (c) | | 687,390 | 12,214,821 |
| Nobia AB | | 1,554,000 | 13,540,497 |
| Nordea Bank AB | | 303,000 | 3,185,272 |
| Pandox AB | | 271,300 | 4,301,319 |
| Svenska Cellulosa AB (SCA) (B Shares) | | 979,000 | 27,737,149 |
| Svenska Handelsbanken AB (A Shares) | | 1,247,300 | 17,004,597 |
| Systemair AB | | 482,379 | 6,181,847 |
|
| TOTAL SWEDEN | | | 217,227,131 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $400,288,937) | | | 417,973,943 |
|
| Money Market Funds - 3.9% | | | |
| Fidelity Cash Central Fund, 0.41% (e) | | 12,732,711 | 12,736,531 |
| Fidelity Securities Lending Cash Central Fund 0.48% (e)(f) | | 3,958,343 | 3,959,135 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $16,695,233) | | | 16,695,666 |
| TOTAL INVESTMENT PORTFOLIO - 101.1% | | | |
| (Cost $416,984,170) | | | 434,669,609 |
| NET OTHER ASSETS (LIABILITIES) - (1.1)% | | | (4,649,647) |
| NET ASSETS - 100% | | | $430,019,962 |
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Non-income producing
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $13,511,393 or 3.1% of net assets.
(c) Security or a portion of the security is on loan at period end.
(d) Affiliated company
(e) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(f) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $40,143 |
| Fidelity Securities Lending Cash Central Fund | 498,934 |
| Total | $539,077 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
| Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
| East Capital Explorer AB | $5,881,630 | $2,469,905 | $-- | $116,274 | $9,439,560 |
| Zalaris ASA (A Shares) | 7,941,931 | 347,140 | -- | 195,500 | 7,059,517 |
| Total | $13,823,561 | $2,817,045 | $-- | $311,774 | $16,499,077 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $102,921,075 | $102,921,075 | $-- | $-- |
| Consumer Staples | 60,752,745 | 45,985,299 | 14,767,446 | -- |
| Energy | 3,225,343 | 3,225,343 | -- | -- |
| Financials | 86,634,703 | 69,630,106 | 17,004,597 | -- |
| Health Care | 37,179,817 | 23,499,443 | 13,680,374 | -- |
| Industrials | 79,782,095 | 79,782,095 | -- | -- |
| Information Technology | 29,003,770 | 29,003,770 | -- | -- |
| Real Estate | 15,292,490 | 15,292,490 | -- | -- |
| Utilities | 3,181,905 | 3,181,905 | -- | -- |
| Money Market Funds | 16,695,666 | 16,695,666 | -- | -- |
| Total Investments in Securities: | $434,669,609 | $389,217,192 | $45,452,417 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $22,585,312 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Nordic Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $3,771,209) — See accompanying schedule:
Unaffiliated issuers (cost $382,950,474) | $401,474,866 | |
| Fidelity Central Funds (cost $16,695,233) | 16,695,666 | |
| Other affiliated issuers (cost $17,338,463) | 16,499,077 | |
| Total Investments (cost $416,984,170) | | $434,669,609 |
| Receivable for investments sold | | 2,452,624 |
| Receivable for fund shares sold | | 84,192 |
| Dividends receivable | | 259,931 |
| Distributions receivable from Fidelity Central Funds | | 9,948 |
| Prepaid expenses | | 1,215 |
| Other receivables | | 11,477 |
| Total assets | | 437,488,996 |
| Liabilities | | |
| Payable for investments purchased | $2,185,579 | |
| Payable for fund shares redeemed | 907,061 | |
| Accrued management fee | 260,717 | |
| Other affiliated payables | 95,038 | |
| Other payables and accrued expenses | 62,382 | |
| Collateral on securities loaned, at value | 3,958,257 | |
| Total liabilities | | 7,469,034 |
| Net Assets | | $430,019,962 |
| Net Assets consist of: | | |
| Paid in capital | | $436,138,424 |
| Undistributed net investment income | | 5,589,227 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (29,386,163) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 17,678,474 |
| Net Assets, for 9,497,403 shares outstanding | | $430,019,962 |
| Net Asset Value, offering price and redemption price per share ($430,019,962 ÷ 9,497,403 shares) | | $45.28 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends (including $311,774 earned from other affiliated issuers) | | $11,607,286 |
| Income from Fidelity Central Funds | | 539,077 |
| Income before foreign taxes withheld | | 12,146,363 |
| Less foreign taxes withheld | | (1,648,902) |
| Total income | | 10,497,461 |
| Expenses | | |
| Management fee | $3,124,641 | |
| Transfer agent fees | 881,264 | |
| Accounting and security lending fees | 235,431 | |
| Custodian fees and expenses | 53,050 | |
| Independent trustees' fees and expenses | 1,915 | |
| Registration fees | 25,425 | |
| Audit | 89,357 | |
| Legal | 1,311 | |
| Miscellaneous | 3,328 | |
| Total expenses before reductions | 4,415,722 | |
| Expense reductions | (37,819) | 4,377,903 |
| Net investment income (loss) | | 6,119,558 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (1,706,332) | |
| Fidelity Central Funds | 4,018 | |
| Foreign currency transactions | (21,445) | |
| Total net realized gain (loss) | | (1,723,759) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 3,080,327 | |
| Assets and liabilities in foreign currencies | (3,496) | |
| Total change in net unrealized appreciation (depreciation) | | 3,076,831 |
| Net gain (loss) | | 1,353,072 |
| Net increase (decrease) in net assets resulting from operations | | $7,472,630 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $6,119,558 | $5,506,157 |
| Net realized gain (loss) | (1,723,759) | 120,453 |
| Change in net unrealized appreciation (depreciation) | 3,076,831 | 10,093,903 |
| Net increase (decrease) in net assets resulting from operations | 7,472,630 | 15,720,513 |
| Distributions to shareholders from net investment income | (5,087,442) | – |
| Distributions to shareholders from net realized gain | (468,224) | – |
| Total distributions | (5,555,666) | – |
| Share transactions | | |
| Proceeds from sales of shares | 96,625,403 | 67,283,706 |
| Reinvestment of distributions | 5,260,046 | – |
| Cost of shares redeemed | (79,556,474) | (164,909,842) |
| Net increase (decrease) in net assets resulting from share transactions | 22,328,975 | (97,626,136) |
| Redemption fees | 47,548 | 50,450 |
| Total increase (decrease) in net assets | 24,293,487 | (81,855,173) |
| Net Assets | | |
| Beginning of period | 405,726,475 | 487,581,648 |
| End of period | $430,019,962 | $405,726,475 |
| Other Information | | |
| Undistributed net investment income end of period | $5,589,227 | $5,079,232 |
| Shares | | |
| Sold | 2,066,948 | 1,529,284 |
| Issued in reinvestment of distributions | 111,940 | – |
| Redeemed | (1,699,653) | (3,755,142) |
| Net increase (decrease) | 479,235 | (2,225,858) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Nordic Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $44.99 | $43.36 | $43.91 | $30.60 | $29.60 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .64 | .56 | .71 | .90 | .70B |
| Net realized and unrealized gain (loss) | .27 | 1.06 | 1.35 | 13.04 | .91 |
| Total from investment operations | .91 | 1.62 | 2.06 | 13.94 | 1.61 |
| Distributions from net investment income | (.57) | – | (.83) | (.63) | (.61) |
| Distributions from net realized gain | (.05) | – | (1.80) | – | – |
| Total distributions | (.62) | – | (2.63) | (.63) | (.61) |
| Redemption fees added to paid in capitalA | –C | .01 | .02 | –C | –C |
| Net asset value, end of period | $45.28 | $44.99 | $43.36 | $43.91 | $30.60 |
| Total ReturnD | 1.97% | 3.76% | 4.88% | 46.42% | 5.69% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .99% | 1.00% | .99% | 1.04% | 1.08% |
| Expenses net of fee waivers, if any | .98% | 1.00% | .99% | 1.04% | 1.08% |
| Expenses net of all reductions | .98% | .99% | .98% | 1.02% | 1.04% |
| Net investment income (loss) | 1.37% | 1.26% | 1.56% | 2.50% | 2.40%B |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $430,020 | $405,726 | $487,582 | $439,147 | $296,951 |
| Portfolio turnover rateG | 63% | 80% | 103% | 61% | 193% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.17 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.83%.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Nordic Fund (the Fund) is a fund of Fidelity Investment Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. 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. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), 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 | $46,593,017 |
| Gross unrealized depreciation | (32,596,376) |
| Net unrealized appreciation (depreciation) on securities | $13,996,641 |
| Tax Cost | $420,672,968 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $6,617,213 |
| Capital loss carryforward | $(26,725,350) |
| Net unrealized appreciation (depreciation) on securities and other investments | $13,989,676 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| Fiscal year of expiration | |
| 2017 | $(24,086,581) |
| No expiration | |
| Short-term | (998,155) |
| Long-term | (1,640,614) |
| Total no expiration | (2,638,769) |
| Total capital loss carryforward | $(26,725,350) |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $5,555,666 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $288,335,754 and $273,039,927, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .70% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .20% of average net assets.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,149 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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 $498,934, including $1 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 $34,792 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $3,027.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Fidelity® Pacific Basin Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended October 31, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Pacific Basin Fund | 12.05% | 10.98% | 6.60% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Pacific Basin Fund on October 31, 2006.
The chart shows how the value of your investment would have changed, and also shows how the MSCI AC (All Country) Pacific Index performed over the same period.
| Period Ending Values |
| $18,947 | Fidelity® Pacific Basin Fund |
| $13,303 | MSCI AC (All Country) Pacific Index |
Fidelity® Pacific Basin Fund
Management's Discussion of Fund Performance
Market Recap: Non-U.S equities eked a 0.40% gain for the year ending October 31, 2016, according to the MSCI ACWI (All Country World Index) ex USA Index. After early-2016 volatility largely driven by concerns about energy prices and global growth, central banks in Europe, Japan and China took action to reignite their economies; the U.S. Federal Reserve added fuel by softening its rate-hike stance. Stock prices recovered nicely until the U.K.’s June vote to exit the European Union – dubbed “Brexit” – touched off near-tumult in global markets. Starting with a sharp initial rebound, the MSCI index then traced a generally upward arc into autumn. Among segments, small-cap stocks outpaced large-caps; growth and value finished close together. Regionally, Canada (+10%) and emerging markets (+9%) were aided by rising commodity prices. Japan (+4%) bettered the index but lagged the rest of the Asia Pacific region (+9%). Europe (-5%) and the U.K. (-11%) were beset by Brexit stress. Among sectors, materials (+16%) and energy (+11%) overcame early-2016 lows. Information technology (+13%) also performed well. Financials (-3%) trailed ex the recently created real estate sector (+3%). Utilities (-3%) and telecom services (-4%) declined amid a mode switch from “risk off” to “risk on.” Meanwhile, health care (-12%) suffered amid U.S. political uncertainty.
Comments from Portfolio Manager John Dance: For the year, the fund returned 12.05%, significantly outperforming the 6.15% gain of the benchmark MSCI AC (All Country) Pacific Index. Versus the benchmark, stock selection in Japan added roughly 6 percentage points to the fund’s result. Among sectors, picks in consumer staples and financials added the most value. The top relative contributor by a wide margin was Japan-based Sosei Group, an out-of-index biotech stock. Sosei’s stock had an especially strong April, buoyed by news that Allergan would pay the company $125 million in advance fees for the rights to a portfolio of treatments. I liquidated most of the position to lock in profits. Other contributors included Petronet LNG, an India-based import terminal for liquefied natural gas; Nitori Holdings, a home furnishings retailer headquartered in Japan; and Kweichow Moutai, a China-based maker of distilled spirits. Conversely, information technology was the only significant detractor among sectors; on a country basis, Hong Kong and South Korea were the main negatives. A large overweighting in KEPCO Plant Service & Engineering, a Korea-based provider of power plant maintenance, was our largest individual detractor. Also weighing on results were PAX Global Technology, a Hong Kong-listed, China-based provider of electronic point-of-sale devices, and 1-Page, an Australian provider of a cloud-based human-resources platform.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Pacific Basin Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
| As of October 31, 2016 |
| | Japan | 36.0% |
| | Australia | 13.4% |
| | India | 7.9% |
| | Taiwan | 7.4% |
| | China | 5.4% |
| | Hong Kong | 5.3% |
| | Bermuda | 4.1% |
| | United States of America* | 3.2% |
| | Indonesia | 3.2% |
| | Other | 14.1% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
| As of April 30, 2016 |
| | Japan | 36.6% |
| | Australia | 13.9% |
| | Taiwan | 7.7% |
| | Hong Kong | 6.0% |
| | India | 5.8% |
| | Bermuda | 4.8% |
| | China | 4.3% |
| | United States of America* | 3.7% |
| | Indonesia | 3.2% |
| | Other | 14.0% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Stocks | 99.4 | 98.8 |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.6 | 1.2 |
Top Ten Stocks as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan, Semiconductors & Semiconductor Equipment) | 3.3 | 2.9 |
| Naspers Ltd. Class N (South Africa, Media) | 2.9 | 2.2 |
| AIA Group Ltd. (Hong Kong, Insurance) | 2.0 | 2.2 |
| Commonwealth Bank of Australia (Australia, Banks) | 2.0 | 2.1 |
| Alibaba Group Holding Ltd. sponsored ADR (Cayman Islands, Internet Software & Services) | 1.9 | 1.2 |
| Kweichow Moutai Co. Ltd. (A Shares) (China, Beverages) | 1.8 | 1.6 |
| KDDI Corp. (Japan, Wireless Telecommunication Services) | 1.6 | 1.8 |
| Fuji Heavy Industries Ltd. (Japan, Automobiles) | 1.5 | 1.1 |
| Daito Trust Construction Co. Ltd. (Japan, Real Estate Management & Development) | 1.5 | 1.3 |
| Cheung Kong Infrastructure Holdings Ltd. (Bermuda, Electric Utilities) | 1.4 | 1.8 |
| | 19.9 | |
Top Market Sectors as of October 31, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Financials | 19.9 | 22.2 |
| Health Care | 14.6 | 15.5 |
| Consumer Discretionary | 14.0 | 16.5 |
| Information Technology | 11.6 | 10.0 |
| Consumer Staples | 11.5 | 11.7 |
| Industrials | 10.6 | 9.8 |
| Real Estate | 4.8 | 0.0 |
| Telecommunication Services | 4.2 | 4.8 |
| Materials | 4.0 | 3.7 |
| Energy | 2.3 | 2.2 |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications.
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity® Pacific Basin Fund
Investments October 31, 2016
Showing Percentage of Net Assets
| Common Stocks - 99.4% | | | |
| | | Shares | Value |
| Australia - 13.4% | | | |
| 1-Page Ltd. (a)(b) | | 872,167 | $129,374 |
| Aconex Ltd. (b) | | 1,044,424 | 4,417,383 |
| ALS Ltd. | | 599,406 | 2,840,682 |
| Amcor Ltd. | | 447,130 | 4,999,937 |
| Arena (REIT) unit | | 2,192,142 | 3,226,733 |
| Asaleo Care Ltd. | | 3,476,847 | 3,861,463 |
| Australia & New Zealand Banking Group Ltd. | | 432,796 | 9,168,997 |
| Blue Sky Alternative Investments Ltd. | | 812,543 | 4,499,779 |
| Commonwealth Bank of Australia | | 240,378 | 13,419,768 |
| CSL Ltd. | | 106,723 | 8,159,823 |
| Hansen Technologies Ltd. | | 1,580,243 | 4,940,593 |
| HUB24 Ltd. (b) | | 847,594 | 3,417,253 |
| Magellan Financial Group Ltd. | | 251,802 | 4,078,010 |
| NIB Holdings Ltd. | | 1,403,041 | 5,144,354 |
| realestate.com.au Ltd. | | 133,721 | 5,202,041 |
| Reliance Worldwide Corp. Ltd. | | 1,035,565 | 2,331,753 |
| Sydney Airport unit | | 1,171,376 | 5,578,071 |
| Woodside Petroleum Ltd. | | 309,417 | 6,677,547 |
|
| TOTAL AUSTRALIA | | | 92,093,561 |
|
| Bermuda - 4.1% | | | |
| Brilliance China Automotive Holdings Ltd. | | 2,248,000 | 2,669,582 |
| Cheung Kong Infrastructure Holdings Ltd. | | 1,211,000 | 9,923,094 |
| Dairy Farm International Holdings Ltd. | | 864,700 | 6,113,429 |
| Hongkong Land Holdings Ltd. | | 982,000 | 6,579,400 |
| PAX Global Technology Ltd. (a) | | 4,667,000 | 2,918,549 |
|
| TOTAL BERMUDA | | | 28,204,054 |
|
| Cayman Islands - 2.4% | | | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | | 130,400 | 13,260,376 |
| China High Precision Automation Group Ltd. (b) | | 1,875,000 | 2 |
| China Metal Recycling (Holdings) Ltd. (b) | | 2,572,200 | 3 |
| International Housewares Retail Co. Ltd. | | 17,378,000 | 3,473,113 |
|
| TOTAL CAYMAN ISLANDS | | | 16,733,494 |
|
| China - 5.4% | | | |
| Industrial & Commercial Bank of China Ltd. (H Shares) | | 13,110,000 | 7,869,143 |
| Jiangsu Hengrui Medicine Co. Ltd. (A Shares) | | 1,381,079 | 9,404,496 |
| Kweichow Moutai Co. Ltd. (A Shares) | | 261,750 | 12,282,448 |
| Shenzhen Expressway Co. (H Shares) | | 4,216,000 | 4,234,727 |
| Weifu High-Technology Co. Ltd. (B Shares) | | 1,382,213 | 3,265,035 |
|
| TOTAL CHINA | | | 37,055,849 |
|
| Hong Kong - 5.3% | | | |
| AIA Group Ltd. | | 2,207,800 | 13,934,771 |
| China Resources Beer Holdings Co. Ltd. | | 2,050,666 | 4,362,810 |
| Hang Seng Bank Ltd. | | 394,400 | 7,124,632 |
| Magnificent Hotel Investment Ltd. | | 90,048,000 | 2,113,162 |
| Techtronic Industries Co. Ltd. | | 2,368,500 | 8,917,511 |
|
| TOTAL HONG KONG | | | 36,452,886 |
|
| India - 7.9% | | | |
| Asian Paints Ltd. | | 433,057 | 6,945,875 |
| Bharti Infratel Ltd. | | 1,673,826 | 8,673,324 |
| HDFC Bank Ltd. | | 281,357 | 6,287,212 |
| Housing Development Finance Corp. Ltd. | | 291,623 | 6,084,236 |
| Indraprastha Gas Ltd. (b) | | 269,883 | 3,479,467 |
| Page Industries Ltd. | | 18,365 | 4,529,714 |
| Petronet LNG Ltd. | | 1,596,517 | 9,305,474 |
| Sun Pharmaceutical Industries Ltd. | | 831,279 | 9,264,203 |
|
| TOTAL INDIA | | | 54,569,505 |
|
| Indonesia - 3.2% | | | |
| PT Bank Central Asia Tbk | | 7,964,500 | 9,476,461 |
| PT Bank Rakyat Indonesia Tbk | | 8,236,100 | 7,700,829 |
| PT Gudang Garam Tbk | | 886,300 | 4,612,183 |
|
| TOTAL INDONESIA | | | 21,789,473 |
|
| Israel - 0.8% | | | |
| Sarine Technologies Ltd. | | 4,978,000 | 5,832,266 |
| Japan - 36.0% | | | |
| Arcland Service Holdings Co. Ltd. | | 191,500 | 5,688,209 |
| Asahi Group Holdings | | 227,600 | 8,140,818 |
| Astellas Pharma, Inc. | | 655,800 | 9,733,294 |
| Broadleaf Co. Ltd. | | 146,951 | 1,654,898 |
| Create SD Holdings Co. Ltd. | | 211,800 | 4,443,215 |
| Daito Trust Construction Co. Ltd. | | 61,900 | 10,373,725 |
| East Japan Railway Co. | | 78,300 | 6,911,634 |
| Fuji Heavy Industries Ltd. | | 268,400 | 10,478,017 |
| Harmonic Drive Systems, Inc. (a) | | 115,100 | 3,249,844 |
| Hoya Corp. | | 167,700 | 7,012,153 |
| Hulic Co. Ltd. | | 321,400 | 3,067,812 |
| Japan Tobacco, Inc. | | 233,400 | 8,889,097 |
| Kakaku.com, Inc. | | 304,100 | 5,118,113 |
| Kao Corp. | | 138,300 | 7,127,982 |
| KDDI Corp. | | 367,800 | 11,178,610 |
| Keyence Corp. | | 10,800 | 7,935,997 |
| Kyushu Railway Co. | | 48,500 | 1,429,055 |
| Misumi Group, Inc. | | 262,700 | 4,802,097 |
| Mitsubishi Pencil Co. Ltd. | | 96,200 | 4,825,136 |
| Mitsui Fudosan Co. Ltd. | | 196,000 | 4,467,798 |
| Nakanishi, Inc. | | 138,400 | 4,955,583 |
| Nidec Corp. | | 78,300 | 7,593,316 |
| Nihon M&A Center, Inc. | | 113,600 | 3,699,285 |
| Nihon Parkerizing Co. Ltd. | | 426,800 | 5,901,211 |
| Nitori Holdings Co. Ltd. | | 61,400 | 7,359,569 |
| Olympus Corp. | | 135,500 | 4,845,285 |
| Open House Co. Ltd. | | 191,800 | 4,065,714 |
| ORIX Corp. | | 458,000 | 7,273,758 |
| PeptiDream, Inc. (a)(b) | | 48,600 | 2,511,796 |
| ProNexus, Inc. | | 276,400 | 2,922,929 |
| Rakuten, Inc. | | 432,400 | 4,999,380 |
| Seven Bank Ltd. | | 1,402,200 | 4,318,781 |
| Shionogi & Co. Ltd. | | 155,400 | 7,672,940 |
| SK Kaken Co. Ltd. | | 48,000 | 5,002,765 |
| SMS Co., Ltd. | | 153,400 | 4,009,435 |
| SoftBank Corp. | | 143,900 | 9,062,983 |
| Sosei Group Corp. (a)(b) | | 27,300 | 4,107,886 |
| Start Today Co. Ltd. | | 325,800 | 5,728,761 |
| Sysmex Corp. | | 85,000 | 5,908,744 |
| The Suruga Bank Ltd. | | 251,900 | 6,161,185 |
| Tokyo Century Corp. | | 91,500 | 3,232,645 |
| Toshiba Plant Systems & Services Corp. | | 355,900 | 5,752,365 |
| Welcia Holdings Co. Ltd. | | 65,800 | 4,498,770 |
|
| TOTAL JAPAN | | | 248,112,590 |
|
| Korea (South) - 2.6% | | | |
| BGFretail Co. Ltd. | | 26,620 | 4,049,713 |
| Cheil Industries, Inc. | | 19,172 | 2,707,116 |
| KEPCO Plant Service & Engineering Co. Ltd. | | 88,695 | 4,257,341 |
| LG Household & Health Care Ltd. | | 4,513 | 3,235,536 |
| Medy-Tox, Inc. | | 10,750 | 3,823,459 |
|
| TOTAL KOREA (SOUTH) | | | 18,073,165 |
|
| Netherlands - 0.5% | | | |
| Hangzhou Hikvision Digital Technology Co. Ltd. ELS (A Shares) (BNP Paribas Warrant Program) warrants 11/27/17 (b)(c) | | 900,000 | 3,259,541 |
| New Zealand - 1.9% | | | |
| EBOS Group Ltd. | | 495,076 | 6,036,192 |
| Ryman Healthcare Group Ltd. | | 1,120,794 | 7,117,141 |
|
| TOTAL NEW ZEALAND | | | 13,153,333 |
|
| Philippines - 1.5% | | | |
| Bank of the Philippine Islands (BPI) | | 2,604,550 | 5,437,182 |
| D&L Industries, Inc. | | 20,046,200 | 4,544,901 |
|
| TOTAL PHILIPPINES | | | 9,982,083 |
|
| South Africa - 2.9% | | | |
| Naspers Ltd. Class N | | 118,300 | 19,827,286 |
| Taiwan - 7.4% | | | |
| Advantech Co. Ltd. | | 743,000 | 6,056,457 |
| CTCI Corp. | | 3,474,000 | 5,107,122 |
| ECLAT Textile Co. Ltd. | | 418,000 | 4,759,567 |
| Nien Made Enterprise Co. Ltd. | | 589,000 | 6,837,433 |
| Taiwan Semiconductor Manufacturing Co. Ltd. | | 3,806,000 | 22,862,170 |
| Voltronic Power Technology Corp. | | 329,703 | 4,956,760 |
|
| TOTAL TAIWAN | | | 50,579,509 |
|
| Thailand - 1.0% | | | |
| Thai Beverage PCL | | 10,071,600 | 6,985,872 |
| United Kingdom - 0.5% | | | |
| Jiangsu Yanghe Brewery Joint-Stock Co. Ltd. ELS (UBS Warrant Programme) warrants 10/23/17 (b)(c) | | 357,688 | 3,676,757 |
| United States of America - 2.6% | | | |
| China Biologic Products, Inc. (b) | | 41,600 | 4,913,376 |
| Cognizant Technology Solutions Corp. Class A (b) | | 147,300 | 7,563,855 |
| GI Dynamics, Inc. CDI (b) | | 5,561,290 | 88,840 |
| ResMed, Inc. CDI | | 923,110 | 5,505,325 |
|
| TOTAL UNITED STATES OF AMERICA | | | 18,071,396 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $567,636,394) | | | 684,452,620 |
|
| Money Market Funds - 1.6% | | | |
| Fidelity Cash Central Fund, 0.41% (d) | | 3,361,523 | 3,362,532 |
| Fidelity Securities Lending Cash Central Fund 0.48% (d)(e) | | 7,331,506 | 7,332,972 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $10,693,414) | | | 10,695,504 |
| TOTAL INVESTMENT PORTFOLIO - 101.0% | | | |
| (Cost $578,329,808) | | | 695,148,124 |
| NET OTHER ASSETS (LIABILITIES) - (1.0)% | | | (6,829,777) |
| NET ASSETS - 100% | | | $688,318,347 |
Security Type Abbreviations
ELS – Equity-Linked Security
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $6,936,298 or 1.0% of net assets.
(d) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $31,055 |
| Fidelity Securities Lending Cash Central Fund | 418,713 |
| Total | $449,768 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Consumer Discretionary | $95,848,380 | $95,848,380 | $-- | $-- |
| Consumer Staples | 78,603,336 | 78,603,336 | -- | -- |
| Energy | 15,983,021 | 15,983,021 | -- | -- |
| Financials | 136,693,634 | 115,600,981 | 21,092,653 | -- |
| Health Care | 101,060,536 | 91,327,242 | 9,733,294 | -- |
| Industrials | 73,903,159 | 73,903,159 | -- | -- |
| Information Technology | 80,867,202 | 58,005,030 | 22,862,170 | 2 |
| Materials | 27,394,692 | 27,394,689 | -- | 3 |
| Real Estate | 31,781,182 | 31,781,182 | -- | -- |
| Telecommunication Services | 28,914,917 | 8,673,324 | 20,241,593 | -- |
| Utilities | 13,402,561 | 13,402,561 | -- | -- |
| Money Market Funds | 10,695,504 | 10,695,504 | -- | -- |
| Total Investments in Securities: | $695,148,124 | $621,218,409 | $73,929,710 | $5 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended October 31, 2016. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $373,505,253 |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Pacific Basin Fund
Financial Statements
Statement of Assets and Liabilities
| | | October 31, 2016 |
| Assets | | |
Investment in securities, at value (including securities loaned of $6,911,242) — See accompanying schedule:
Unaffiliated issuers (cost $567,636,394) | $684,452,620 | |
| Fidelity Central Funds (cost $10,693,414) | 10,695,504 | |
| Total Investments (cost $578,329,808) | | $695,148,124 |
| Receivable for investments sold | | 757,258 |
| Receivable for fund shares sold | | 978,261 |
| Dividends receivable | | 1,402,975 |
| Distributions receivable from Fidelity Central Funds | | 34,230 |
| Prepaid expenses | | 1,748 |
| Other receivables | | 41,592 |
| Total assets | | 698,364,188 |
| Liabilities | | |
| Payable for investments purchased | $1,536,509 | |
| Payable for fund shares redeemed | 390,223 | |
| Accrued management fee | 517,424 | |
| Other affiliated payables | 132,503 | |
| Other payables and accrued expenses | 137,627 | |
| Collateral on securities loaned, at value | 7,331,555 | |
| Total liabilities | | 10,045,841 |
| Net Assets | | $688,318,347 |
| Net Assets consist of: | | |
| Paid in capital | | $562,353,693 |
| Undistributed net investment income | | 4,193,451 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 5,056,934 |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 116,714,269 |
| Net Assets, for 23,886,203 shares outstanding | | $688,318,347 |
| Net Asset Value, offering price and redemption price per share ($688,318,347 ÷ 23,886,203 shares) | | $28.82 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended October 31, 2016 |
| Investment Income | | |
| Dividends | | $14,077,819 |
| Income from Fidelity Central Funds | | 449,768 |
| Income before foreign taxes withheld | | 14,527,587 |
| Less foreign taxes withheld | | (1,127,613) |
| Total income | | 13,399,974 |
| Expenses | | |
| Management fee | | |
| Basic fee | $4,548,902 | |
| Performance adjustment | 1,374,143 | |
| Transfer agent fees | 1,212,934 | |
| Accounting and security lending fees | 323,920 | |
| Custodian fees and expenses | 167,460 | |
| Independent trustees' fees and expenses | 2,933 | |
| Registration fees | 28,284 | |
| Audit | 93,684 | |
| Legal | 2,331 | |
| Miscellaneous | 5,670 | |
| Total expenses before reductions | 7,760,261 | |
| Expense reductions | (30,583) | 7,729,678 |
| Net investment income (loss) | | 5,670,296 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 11,958,907 | |
| Fidelity Central Funds | 3,326 | |
| Foreign currency transactions | 92,182 | |
| Total net realized gain (loss) | | 12,054,415 |
Change in net unrealized appreciation (depreciation) on:
Investment securities (net of decrease in deferred foreign taxes of $50,320) | 55,475,381 | |
| Assets and liabilities in foreign currencies | (96,976) | |
| Total change in net unrealized appreciation (depreciation) | | 55,378,405 |
| Net gain (loss) | | 67,432,820 |
| Net increase (decrease) in net assets resulting from operations | | $73,103,116 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended October 31, 2016 | Year ended October 31, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $5,670,296 | $9,343,644 |
| Net realized gain (loss) | 12,054,415 | 28,035,513 |
| Change in net unrealized appreciation (depreciation) | 55,378,405 | (45,966,498) |
| Net increase (decrease) in net assets resulting from operations | 73,103,116 | (8,587,341) |
| Distributions to shareholders from net investment income | (8,723,132) | (4,307,962) |
| Distributions to shareholders from net realized gain | (22,916,293) | (38,224,213) |
| Total distributions | (31,639,425) | (42,532,175) |
| Share transactions | | |
| Proceeds from sales of shares | 74,529,168 | 132,445,887 |
| Reinvestment of distributions | 30,030,138 | 40,866,947 |
| Cost of shares redeemed | (111,767,463) | (165,448,385) |
| Net increase (decrease) in net assets resulting from share transactions | (7,208,157) | 7,864,449 |
| Redemption fees | 30,553 | 85,778 |
| Total increase (decrease) in net assets | 34,286,087 | (43,169,289) |
| Net Assets | | |
| Beginning of period | 654,032,260 | 697,201,549 |
| End of period | $688,318,347 | $654,032,260 |
| Other Information | | |
| Undistributed net investment income end of period | $4,193,451 | $7,437,966 |
| Shares | | |
| Sold | 2,706,719 | 4,689,033 |
| Issued in reinvestment of distributions | 1,147,503 | 1,545,649 |
| Redeemed | (4,183,480) | (6,127,983) |
| Net increase (decrease) | (329,258) | 106,699 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Pacific Basin Fund
| Years ended October 31, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $27.01 | $28.92 | $31.47 | $24.85 | $22.96 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .24 | .37B | .31 | .12 | .30 |
| Net realized and unrealized gain (loss) | 2.88 | (.49) | 1.25 | 7.26 | 1.79 |
| Total from investment operations | 3.12 | (.12) | 1.56 | 7.38 | 2.09 |
| Distributions from net investment income | (.36) | (.18) | (.18) | (.29) | (.12) |
| Distributions from net realized gain | (.95) | (1.61) | (3.93) | (.47) | (.08) |
| Total distributions | (1.31) | (1.79) | (4.11) | (.76) | (.20) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $28.82 | $27.01 | $28.92 | $31.47 | $24.85 |
| Total ReturnD | 12.05% | (.29)% | 5.68% | 30.58% | 9.22% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.19% | 1.17% | 1.18% | 1.23% | 1.28% |
| Expenses net of fee waivers, if any | 1.19% | 1.17% | 1.18% | 1.22% | 1.28% |
| Expenses net of all reductions | 1.19% | 1.17% | 1.18% | 1.21% | 1.26% |
| Net investment income (loss) | .87% | 1.34%B | 1.09% | .42% | 1.29% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $688,318 | $654,032 | $697,202 | $719,675 | $581,254 |
| Portfolio turnover rateG | 30% | 36% | 30% | 82% | 26% |
A Calculated based on average shares outstanding during the period.
B Net Investment income per share reflects a large, non-recurring dividend which amounted to $.10 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .99%.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
1. Organization.
Fidelity Pacific Basin Fund (the Fund) is a fund of Fidelity Investment Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs)and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of October 31, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), deferred trustees compensation 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 | $154,189,671 |
| Gross unrealized depreciation | (43,588,505) |
| Net unrealized appreciation (depreciation) on securities | $110,601,166 |
| Tax Cost | $584,546,958 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $7,900,747 |
| Undistributed long-term capital gain | $7,567,769 |
| Net unrealized appreciation (depreciation) on securities and other investments | $110,527,171 |
The tax character of distributions paid was as follows:
| | October 31, 2016 | October 31, 2015 |
| Ordinary Income | $8,723,132 | $ 8,734,926 |
| Long-term Capital Gains | 22,916,293 | 33,797,249 |
| Total | $31,639,425 | $ 42,532,175 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.50% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $194,332,452 and $223,295,528, 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 .45% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the Fund's relative investment performance as compared to its benchmark index, the MSCI All Country Pacific Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .91% 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 Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .19% of average net assets.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $132 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $1,658 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. The value of securities loaned to FCM at period end was $6,119. 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 $418,713, including $4,669 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 $25,869 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expense by $51.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $4,663.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Investment Trust and the Shareholders of Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Asia Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund and Fidelity Pacific Basin Fund:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Asia Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund and Fidelity Pacific Basin Fund (each a fund of Fidelity Investment Trust) at October 31, 2016, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fidelity Investment Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, oversee management of the risks associated with such activities and contractual arrangements, and review each fund's performance. Except for Jonathan Chiel, each of the Trustees oversees 170 funds. Mr. Chiel oversees 120 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the funds is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Each fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing each fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the funds, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the funds. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The funds' Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the funds' Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, each fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the funds' activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the funds' business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the funds are carried out by or through FMR, its affiliates, and other service providers, the funds' exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the funds' activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the funds' Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the funds' Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Jonathan Chiel (1957)
Year of Election or Appointment: 2016
Trustee
Mr. Chiel also serves as Trustee of other Fidelity funds. Mr. Chiel is Executive Vice President and General Counsel for FMR LLC (diversified financial services company, 2012-present). Previously, Mr. Chiel served as general counsel (2004-2012) and senior vice president and deputy general counsel (2000-2004) for John Hancock Financial Services; a partner with Choate, Hall & Stewart (1996-2000) (law firm); and an Assistant United States Attorney for the United States Attorney’s Office of the District of Massachusetts (1986-95), including Chief of the Criminal Division (1993-1995). Mr. Chiel is a director on the boards of the Boston Bar Foundation and the Maimonides School.
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2001
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (UK) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2014
Vice President of certain Equity Funds
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Head of Global Equity Research (2016-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (UK) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees 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 (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Annualized Expense Ratio-A | Beginning
Account Value
May 1, 2016 | Ending
Account Value
October 31, 2016 | Expenses Paid
During Period-B
May 1, 2016
to October 31, 2016 |
| Canada | | | | |
| Class A | 1.40% | | | |
| Actual | | $1,000.00 | $1,007.30 | $7.06 |
| Hypothetical-C | | $1,000.00 | $1,018.10 | $7.10 |
| Class T | 1.69% | | | |
| Actual | | $1,000.00 | $1,006.10 | $8.52 |
| Hypothetical-C | | $1,000.00 | $1,016.64 | $8.57 |
| Class C | 2.13% | | | |
| Actual | | $1,000.00 | $1,003.60 | $10.73 |
| Hypothetical-C | | $1,000.00 | $1,014.43 | $10.79 |
| Canada | 1.09% | | | |
| Actual | | $1,000.00 | $1,009.00 | $5.50 |
| Hypothetical-C | | $1,000.00 | $1,019.66 | $5.53 |
| Class I | 1.12% | | | |
| Actual | | $1,000.00 | $1,009.20 | $5.66 |
| Hypothetical-C | | $1,000.00 | $1,019.51 | $5.69 |
| China Region | | | | |
| Class A | 1.32% | | | |
| Actual | | $1,000.00 | $1,116.70 | $7.02 |
| Hypothetical-C | | $1,000.00 | $1,018.50 | $6.70 |
| Class T | 1.67% | | | |
| Actual | | $1,000.00 | $1,114.80 | $8.88 |
| Hypothetical-C | | $1,000.00 | $1,016.74 | $8.47 |
| Class C | 2.05% | | | |
| Actual | | $1,000.00 | $1,112.50 | $10.89 |
| Hypothetical-C | | $1,000.00 | $1,014.83 | $10.38 |
| China Region | 1.01% | | | |
| Actual | | $1,000.00 | $1,118.40 | $5.38 |
| Hypothetical-C | | $1,000.00 | $1,020.06 | $5.13 |
| Class I | .99% | | | |
| Actual | | $1,000.00 | $1,118.30 | $5.27 |
| Hypothetical-C | | $1,000.00 | $1,020.16 | $5.03 |
| Emerging Asia | 1.18% | | | |
| Actual | | $1,000.00 | $1,101.30 | $6.23 |
| Hypothetical-C | | $1,000.00 | $1,019.20 | $5.99 |
| Emerging Markets | .99% | | | |
| Actual | | $1,000.00 | $1,078.30 | $5.17 |
| Hypothetical-C | | $1,000.00 | $1,020.16 | $5.03 |
| Class K | .84% | | | |
| Actual | | $1,000.00 | $1,079.10 | $4.39 |
| Hypothetical-C | | $1,000.00 | $1,020.91 | $4.27 |
| Europe | | | | |
| Class A | 1.38% | | | |
| Actual | | $1,000.00 | $951.50 | $6.77 |
| Hypothetical-C | | $1,000.00 | $1,018.20 | $7.00 |
| Class T | 1.69% | | | |
| Actual | | $1,000.00 | $949.90 | $8.28 |
| Hypothetical-C | | $1,000.00 | $1,016.64 | $8.57 |
| Class C | 2.17% | | | |
| Actual | | $1,000.00 | $947.90 | $10.63 |
| Hypothetical-C | | $1,000.00 | $1,014.23 | $10.99 |
| Europe | 1.06% | | | |
| Actual | | $1,000.00 | $952.70 | $5.20 |
| Hypothetical-C | | $1,000.00 | $1,019.81 | $5.38 |
| Class I | .99% | | | |
| Actual | | $1,000.00 | $953.30 | $4.86 |
| Hypothetical-C | | $1,000.00 | $1,020.16 | $5.03 |
| Fidelity Japan Fund | | | | |
| Class A | 1.07% | | | |
| Actual | | $1,000.00 | $1,111.20 | $5.68 |
| Hypothetical-C | | $1,000.00 | $1,019.76 | $5.43 |
| Class T | 1.42% | | | |
| Actual | | $1,000.00 | $1,109.40 | $7.53 |
| Hypothetical-C | | $1,000.00 | $1,018.00 | $7.20 |
| Class C | 1.78% | | | |
| Actual | | $1,000.00 | $1,106.80 | $9.43 |
| Hypothetical-C | | $1,000.00 | $1,016.19 | $9.02 |
| Japan | .77% | | | |
| Actual | | $1,000.00 | $1,111.70 | $4.09 |
| Hypothetical-C | | $1,000.00 | $1,021.27 | $3.91 |
| Class I | .74% | | | |
| Actual | | $1,000.00 | $1,111.90 | $3.93 |
| Hypothetical-C | | $1,000.00 | $1,021.42 | $3.76 |
| Japan Smaller Companies | .96% | | | |
| Actual | | $1,000.00 | $1,111.40 | $5.10 |
| Hypothetical-C | | $1,000.00 | $1,020.31 | $4.88 |
| Fidelity Latin America Fund | | | | |
| Class A | 1.38% | | | |
| Actual | | $1,000.00 | $1,163.80 | $7.51 |
| Hypothetical-C | | $1,000.00 | $1,018.20 | $7.00 |
| Class T | 1.66% | | | |
| Actual | | $1,000.00 | $1,162.40 | $9.02 |
| Hypothetical-C | | $1,000.00 | $1,016.79 | $8.42 |
| Class C | 2.13% | | | |
| Actual | | $1,000.00 | $1,159.50 | $11.56 |
| Hypothetical-C | | $1,000.00 | $1,014.43 | $10.79 |
| Latin America | 1.11% | | | |
| Actual | | $1,000.00 | $1,165.40 | $6.04 |
| Hypothetical-C | | $1,000.00 | $1,019.56 | $5.63 |
| Class I | 1.03% | | | |
| Actual | | $1,000.00 | $1,166.70 | $5.61 |
| Hypothetical-C | | $1,000.00 | $1,019.96 | $5.23 |
| Nordic | .98% | | | |
| Actual | | $1,000.00 | $928.60 | $4.75 |
| Hypothetical-C | | $1,000.00 | $1,020.21 | $4.98 |
| Pacific Basin | 1.18% | | | |
| Actual | | $1,000.00 | $1,084.30 | $6.18 |
| Hypothetical-C | | $1,000.00 | $1,019.20 | $5.99 |
| | | | | |
| | | | | |
| | | | | |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 366 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of each fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity Canada Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.453 | $0.188 |
| Class T | 12/12/16 | 12/09/16 | $0.338 | $0.188 |
| Class C | 12/12/16 | 12/09/16 | $0.105 | $0.188 |
| Canada | 12/12/16 | 12/09/16 | $0.611 | $0.188 |
| Class I | 12/12/16 | 12/09/16 | $0.660 | $0.188 |
| Fidelity China Region Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.182 | $0.050 |
| Class T | 12/12/16 | 12/09/16 | $0.111 | $0.050 |
| Class C | 12/12/16 | 12/09/16 | $0.000 | $0.018 |
| China Region | 12/12/16 | 12/09/16 | $0.271 | $0.050 |
| Class I | 12/12/16 | 12/09/16 | $0.281 | $0.050 |
| Fidelity Emerging Asia Fund | | | | |
| Emerging Asia | 12/12/16 | 12/09/16 | $0.339 | $0.052 |
| Fidelity Emerging Markets Fund | | | | |
| Class K | 12/12/16 | 12/09/16 | $0.178 | $0.000 |
| Emerging Markets | 12/12/16 | 12/09/16 | $0.140 | $0.000 |
| Fidelity Europe Fund | | | | |
| Class A | 12/19/16 | 12/16/16 | $0.224 | $0.126 |
| Class T | 12/19/16 | 12/16/16 | $0.091 | $0.126 |
| Class C | 12/19/16 | 12/16/16 | $0.000 | $0.000 |
| Europe | 12/19/16 | 12/16/16 | $0.382 | $0.126 |
| Class I | 12/19/16 | 12/16/16 | $0.408 | $0.126 |
| Fidelity Japan Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.060 | $0.034 |
| Class T | 12/12/16 | 12/09/16 | $0.010 | $0.034 |
| Class C | 12/12/16 | 12/09/16 | $0.000 | $0.000 |
| Japan | 12/12/16 | 12/09/16 | $0.112 | $0.034 |
| Class I | 12/12/16 | 12/09/16 | $0.110 | $0.034 |
| Fidelity Japan Smaller Companies Fund | | | | |
| Japan Smaller Companies | 12/12/16 | 12/09/16 | $0.169 | $0.245 |
| Fidelity Latin America Fund | | | | |
| Class A | 12/12/16 | 12/09/16 | $0.346 | $0.000 |
| Class T | 12/12/16 | 12/09/16 | $0.289 | $0.000 |
| Class C | 12/12/16 | 12/09/16 | $0.198 | $0.000 |
| Latin America | 12/12/16 | 12/09/16 | $0.395 | $0.000 |
| Class I | 12/12/16 | 12/09/16 | $0.406 | $0.000 |
| Fidelity Nordic Fund | | | | |
| Nordic | 12/12/16 | 12/09/16 | $0.650 | $0.120 |
| Fidelity Pacific Basin Fund | | | | |
| Pacific Basin | 12/19/16 | 12/16/16 | $0.171 | $0.459 |
|
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended October 31, 2016, or, if subsequently determined to be different, the net capital gain of such year.
| Fidelity Pacific Basin Fund | $7,607,921 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends–received deduction for corporate shareholders:
| | Class A | Class T | Class C | Retail Class | Class I | Class K |
| Fidelity Canada Fund | | | | | | |
| December, 2015 | 5% | 7% | 19% | 4% | 4% | – |
| Fidelity Emerging Markets Fund | | | | | | |
| December, 2015 | – | – | – | 9% | – | 7% |
| Fidelity Pacific Basin Fund | | | | | | |
| December, 2015 | – | – | – | 1% | – | – |
|
A percentage of the dividends distributed during the fiscal year for the following funds may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
| | Class A | Class T | Class B | Class C | Retail Class | Class I | Class K |
| Fidelity Canada Fund | | | | | | | |
| December, 2015 | 100% | 100% | – | 100% | 100% | 100% | – |
| Fidelity China Region Fund | | | | | | | |
| December, 2015 | 100% | 100% | – | 100% | 100% | 99% | – |
| Fidelity Emerging Asia Fund | | | | | | | |
| December, 2015 | – | – | – | – | 87% | – | – |
| Fidelity Emerging Markets Fund | | | | | | | |
| December, 2015 | – | – | – | – | 100% | – | 100% |
| Fidelity Europe Fund | | | | | | | |
| December, 2015 | 100% | 100% | – | 100% | 100% | 100% | – |
| Fidelity Japan Fund | | | | | | | |
| December, 2015 | 100% | 100% | – | – | 100% | 100% | – |
| Fidelity Japan Smaller Companies Fund | | | | | | | |
| December, 2015 | – | – | – | – | 91% | – | – |
| Fidelity Latin America Fund | | | | | | | |
| December 04, 2015 | 67% | 78% | 100% | 100% | 56% | 52% | – |
| December 28, 2015 | 25% | 25% | 25% | 25% | 25% | 25% | – |
| Fidelity Nordic Fund | | | | | | | |
| December, 2015 | – | – | – | – | 88% | – | – |
| Fidelity Pacific Basin | | | | | | | |
| December, 2015 | – | – | – | – | 100% | – | – |
|
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are as follows:
| | Pay Date | Income | Taxes |
| Fidelity Canada Fund | | | |
| Class A | 12/07/15 | $0.5458 | $0.1278 |
| Class T | 12/07/15 | $0.4138 | $0.1278 |
| Class C | 12/07/15 | $0.1458 | $0.1278 |
| Canada | 12/07/15 | $0.7408 | $0.1278 |
| Class I | 12/07/15 | $0.7138 | $0.1278 |
| Fidelity China Region Fund | | | |
| Class A | 12/07/15 | $0.3321 | $0.0621 |
| Class T | 12/07/15 | $0.1961 | $0.0621 |
| Class C | 12/07/15 | $0.1221 | $0.0621 |
| China Region | 12/07/15 | $0.4071 | $0.0621 |
| Class I | 12/07/15 | $0.4191 | $0.0621 |
| Fidelity Emerging Asia Fund | | | |
| Emerging Asia | 12/07/15 | $0.2166 | $0.0846 |
| Fidelity Emerging Markets Fund | | | |
| Emerging Markets | 12/07/15 | $0.1491 | $0.0391 |
| Class K | 12/07/15 | $0.1911 | $0.0391 |
| Fidelity Europe Fund | | | |
| Class A | 12/07/15 | $0.4943 | $0.0553 |
| Class T | 12/07/15 | $0.3013 | $0.0553 |
| Class C | 12/07/15 | $0.3323 | $0.0553 |
| Europe | 12/07/15 | $0.6343 | $0.0553 |
| Class I | 12/07/15 | $0.6563 | $0.0553 |
| Fidelity Japan Fund | | | |
| Class A | 12/07/15 | $0.0727 | $0.0177 |
| Class T | 12/07/15 | $0.0257 | $0.0177 |
| Japan | 12/07/15 | $0.0927 | $0.0177 |
| Class I | 12/07/15 | $0.0887 | $0.0177 |
| Fidelity Japan Smaller Companies Fund | | | |
| Japan Smaller Companies | 12/07/15 | $0.1871 | $0.0229 |
| Fidelity Latin America Fund | | | |
| Class A | 12/07/15 | $0.3341 | $0.0571 |
| Class A | 12/29/15 | $0.0280 | $0.0000 |
| Class T | 12/07/15 | $0.2881 | $0.0571 |
| Class T | 12/29/15 | $0.0280 | $0.0000 |
| Class B | 12/07/15 | $0.0631 | $0.0571 |
| Class B | 12/29/15 | $0.0280 | $0.0000 |
| Class C | 12/07/15 | $0.1611 | $0.0571 |
| Class C | 12/29/15 | $0.0280 | $0.0000 |
| Latin America | 12/07/15 | $0.4041 | $0.0571 |
| Latin America | 12/29/15 | $0.0280 | $0.0000 |
| Class I | 12/07/15 | $0.4291 | $0.0571 |
| Class I | 12/29/15 | $0.0280 | $0.0000 |
| Fidelity Nordic Fund | | | |
| Nordic | 12/07/15 | $0.7110 | $0.0940 |
| Fidelity Pacific Basin Fund | | | |
| Pacific Basin | 12/07/15 | $0.4013 | $0.0393 |
|
The funds will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Targeted International Equity Funds
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for each fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of each fund's Advisory Contracts, including the services and support provided to each fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of each fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew each fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to each fund and its shareholders (including the investment performance of each fund); (ii) the competitiveness of each fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with each fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as each fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for each fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of each fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of each fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that each fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in that fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the funds, including the backgrounds of investment personnel of Fidelity, and also considered the funds' investment objectives, strategies, and related investment philosophies. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of each fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for each fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, each fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.
Investment Performance. The Board considered whether each fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there were portfolio management changes for Fidelity Canada Fund in January 2014 and September 2014, for Fidelity Europe Fund in December 2013 and September 2014, for Fidelity Japan Smaller Companies Fund in March 2014, for Fidelity Latin America Fund in October 2015 and December 2015, for Fidelity Nordic Fund in September 2014, and for Fidelity Pacific Basin Fund in October 2013.
The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for each fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for each fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. For Fidelity Emerging Markets Fund, Fidelity Europe Fund, and Fidelity Japan Fund, returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe. For Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Asia Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, and Fidelity Pacific Basin Fund, a peer group is not shown below because the funds do not generally utilize a peer group for performance comparison purposes. For Fidelity Emerging Asia Fund, Fidelity Europe Fund, and Fidelity Pacific Basin Fund, returns of the benchmark index are "net MA,"
i.e., adjusted for tax withholding rates applicable to U.S.-based funds organized as Massachusetts business trusts.
Fidelity Canada Fund
Fidelity China Region Fund
Fidelity Emerging Asia Fund
Fidelity Emerging Markets Fund
Fidelity Europe Fund
Fidelity Japan Fund
Fidelity Japan Smaller Companies Fund
Fidelity Latin America Fund
Fidelity Nordic Fund
Fidelity Pacific Basin Fund
The Board has discussed Fidelity Japan Fund's underperformance with FMR and has engaged with FMR to consider what steps might be taken to remediate the fund's underperformance. The Board noted that there was a portfolio management change for Fidelity Japan Fund in March 2014.
The Board also considered that each of Fidelity Canada Fund's, Fidelity Emerging Asia Fund's, Fidelity Europe Fund's, Fidelity Japan Fund's, and Fidelity Pacific Basin Fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for each fund's shareholders and helps to more closely align the interests of FMR and the shareholders of each fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to each fund under the Advisory Contracts should continue to benefit the shareholders of each fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered each fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the charts below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." For Fidelity Japan Fund, the Total Mapped Group is broader than the Broadridge peer group used by the Board for performance comparisons because the Total Mapped Group combines several Broadridge investment objective categories while the Broadridge peer group does not. The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to a fund's performance adjustment (if applicable), relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than a fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than a fund. The funds' actual TMG %s and the number of funds in the Total Mapped Group are in the charts below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which a fund's management fee rate ranked and the impact of a fund's performance adjustment (if applicable), is also included in the charts and considered by the Board.
Fidelity Canada Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
Fidelity China Region Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
Fidelity Emerging Asia Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
Furthermore, the Board considered that shareholders of Fidelity Emerging Asia Fund approved a prospective change in the index used to calculate the fund's performance adjustment, beginning December 1, 2010. The Board also considered that, because the performance adjustment is based on a rolling 36-month measurement period, during a transition period the fund's performance is compared to a blended index return that reflects the performance of the former index for the portion of the measurement period prior to December 1, 2010 and the performance of the current index for the remainder of the measurement period. The Board noted that the fund's performance adjustments for 2011 through 2013 shown in the chart above reflect the effect of using the blended index return to calculate the fund's performance adjustment.
Fidelity Emerging Markets Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
Fidelity Europe Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
Fidelity Japan Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
Fidelity Japan Smaller Companies Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
Fidelity Latin America Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
Fidelity Nordic Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015.
Fidelity Pacific Basin Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that each fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio (for Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Japan Fund, and Fidelity Latin America Fund). In its review of the total expense ratio of each class of each fund, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of Fidelity Canada Fund's, Fidelity Europe Fund's, and Fidelity Japan Fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the funds. As part of its review, the Board also considered the current and historical total expense ratios of each class of each fund compared to competitive fund median expenses. Each class of each fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the funds offer multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes of each fund vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
For Fidelity Canada Fund, the Board noted that the total expense ratio of the retail class ranked equal to the competitive median for 2015 and the total expense ratio of each of Class A, Class T, Class C, and Class I ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of each of Class A, Class T, Class C, and Class I of Fidelity Canada Fund was above the competitive median because of a positive performance fee adjustment in 2015. The Board noted that the total expense ratio of Class T was also above the competitive median because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans.
For Fidelity Europe Fund, the Board noted that the total expense ratio of each of Class A, Class I, and the retail class ranked below the competitive median for 2015 and the total expense ratio of each of Class T and Class C ranked above the competitive median for 2015. For each of Fidelity Japan Fund and Fidelity Latin America Fund, the Board noted that the total expense ratio of each of Class A, Class C, Class I, and the retail class of the fund ranked below the competitive median for 2015 and the total expense ratio of Class T ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans.
The Board noted that the total expense ratio of each class of Fidelity China Region Fund and Fidelity Emerging Markets Fund ranked below the competitive median for 2015.
Total Expense Ratio (for Fidelity Emerging Asia Fund, Fidelity Japan Smaller Companies Fund, Fidelity Nordic Fund, and Fidelity Pacific Basin Fund). In its review of each fund's total expense ratio, the Board considered the fund's management fee rate as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board noted the impact of Fidelity Emerging Asia Fund's and Fidelity Pacific Basin Fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the funds. As part of its review, the Board also considered the current and historical total expense ratios of each fund compared to competitive fund median expenses. Each fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Fidelity Emerging Asia Fund, Fidelity Japan Smaller Companies Fund, and Fidelity Nordic Fund ranked below the competitive median for 2015.
The Board noted that Fidelity Pacific Basin Fund's total expense ratio ranked equal to the competitive median for 2015.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although some classes of some funds were above the median of the universe presented for comparison, the total expense ratio of each fund or each class of each fund, as applicable, was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing each fund and servicing each fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with each fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the funds' business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of each fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including each fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which each fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that each fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that each fund's Advisory Contracts should be renewed.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
TIF-ANN-1216
1.754542.116
Item 2.
Code of Ethics
As of the end of the period, October 31, 2016, Fidelity Investment Trust (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3.
Audit Committee Financial Expert
The Board of Trustees of the trust has determined that Joseph Mauriello is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Mauriello is independent for purposes of Item 3 of Form N-CSR.
Item 4.
Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by PricewaterhouseCoopers LLP (“PwC”) in each of the last two fiscal years for services rendered to Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Asia Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund and Fidelity Pacific Basin Fund (the “Funds”):
Services Billed by PwC
October 31, 2016 FeesA
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Canada Fund | $68,000 | $- | $5,700 | $2,900 |
Fidelity China Region Fund | $81,000 | $- | $5,500 | $2,900 |
Fidelity Emerging Asia Fund | $68,000 | $- | $5,500 | $2,900 |
Fidelity Emerging Markets Fund | $79,000 | $- | $6,700 | $3,400 |
Fidelity Europe Fund | $72,000 | $- | $12,700 | $3,000 |
Fidelity Japan Fund | $69,000 | $- | $5,500 | $2,900 |
Fidelity Japan Smaller Companies Fund | $57,000 | $- | $5,500 | $2,400 |
Fidelity Latin America Fund | $68,000 | $- | $5,500 | $2,800 |
Fidelity Nordic Fund | $56,000 | $- | $23,400 | $2,400 |
Fidelity Pacific Basin Fund | $69,000 | $- | $5,700 | $2,900 |
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Canada Fund | $65,000 | $- | $5,200 | $2,400 |
Fidelity China Region Fund | $63,000 | $- | $5,200 | $2,300 |
Fidelity Emerging Asia Fund | $65,000 | $- | $5,200 | $2,100 |
Fidelity Emerging Markets Fund | $81,000 | $- | $5,900 | $2,900 |
Fidelity Europe Fund | $70,000 | $- | $15,400 | $2,200 |
Fidelity Japan Fund | $64,000 | $- | $7,600 | $1,900 |
Fidelity Japan Smaller Companies Fund | $54,000 | $- | $5,200 | $1,900 |
Fidelity Latin America Fund | $64,000 | $- | $5,200 | $2,000 |
Fidelity Nordic Fund | $54,000 | $- | $37,600 | $1,900 |
Fidelity Pacific Basin Fund | $65,000 | $- | $5,400 | $2,000 |
A Amounts may reflect rounding.
The following table presents fees billed by PwC that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Funds and that are rendered on behalf of Fidelity Management & Research Company (“FMR”) and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Funds (“Fund Service Providers”):
Services Billed by PwC
| | |
| October 31, 2016A | October 31, 2015A |
Audit-Related Fees | $5,775,000 | $3,465,000 |
Tax Fees | $10,000 | $- |
All Other Fees | $- | $- |
A Amounts may reflect rounding.
“Audit-Related Fees” represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
“Tax Fees” represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
“All Other Fees” represent fees billed for services provided to the fund or Fund Service Provider, a significant portion of which are assurance related, that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by PwC for services rendered to the Funds, FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Funds are as follows:
| | |
Billed By | October 31, 2016 A | October 31, 2015 A |
PwC | $6,665,000 | $4,885,000 |
A Amounts may reflect rounding.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by PwC to Fund Service Providers to be compatible with maintaining the independence of PwC in its audit of the Funds, taking into account representations from PwC, in accordance with Public Company Accounting Oversight Board rules, regarding its independence from the Funds and its related entities and FMR’s review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by a fund’s independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund (“Covered Service”) are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair’s absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X (“De Minimis Exception”)
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Funds’ last two fiscal years relating to services provided to (i) the Funds or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Funds.
Item 5.
Audit Committee of Listed Registrants
Not applicable.
Item 6.
Investments
(a)
Not applicable.
(b)
Not applicable
Item 7.
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8.
Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9.
Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10.
Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the trust’s Board of Trustees.
Item 11.
Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the trust’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the trust’s internal control over financial reporting.
Item 12.
Exhibits
| | |
(a) | (1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Investment Trust
| |
By: | /s/ Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
| |
Date: | December 28, 2016 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| |
By: | /s/Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
| |
Date: | December 28, 2016 |
| |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
| |
Date: | December 28, 2016 |
