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 811-4118
Fidelity Securities Fund
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | July 31 |
Date of reporting period: | January 31, 2008 |
This report on Form N-CSR relates solely to the Registrant's Fidelity Blue Chip Growth Fund, Fidelity Blue Chip Value Fund, Fidelity Dividend Growth Fund, Fidelity Growth & Income Portfolio, Fidelity International Real Estate Fund, Fidelity Leveraged Company Stock Fund, Fidelity OTC Portfolio, Fidelity Small Cap Growth Fund, Fidelity Small Cap Opportunities Fund and Fidelity Small Cap Value Fund series (each, a "Fund" and collectively, the "Funds").
Item 1. Reports to Stockholders
Fidelity®
Blue Chip Growth
Fund
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a share-holder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 962.00 | $ 2.81 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,022.27 | $ 2.90 |
* Expenses are equal to the Fund's annualized expense ratio of .57%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Microsoft Corp. | 4.8 | 3.7 |
Cisco Systems, Inc. | 3.7 | 3.6 |
Exxon Mobil Corp. | 2.9 | 2.3 |
Google, Inc. Class A (sub. vtg.) | 2.9 | 2.5 |
The Coca-Cola Co. | 2.7 | 2.7 |
International Business Machines Corp. | 2.7 | 3.1 |
Merck & Co., Inc. | 2.5 | 2.0 |
Intel Corp. | 2.3 | 3.3 |
Hewlett-Packard Co. | 2.1 | 0.0 |
Apple, Inc. | 2.1 | 2.1 |
28.7 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Information Technology | 30.7 | 33.2 |
Consumer Discretionary | 15.3 | 10.4 |
Health Care | 14.6 | 13.7 |
Consumer Staples | 12.3 | 12.3 |
Energy | 9.3 | 5.6 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 99.9% | ![]() | Stocks 99.2% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 15.4% | ** Foreign investments | 14.2% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.9% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 15.3% | |||
Hotels, Restaurants & Leisure - 3.9% | |||
Chipotle Mexican Grill, Inc.: | |||
Class A (a) | 103,800 | $ 12,637 | |
Class B (a) | 684,100 | 65,550 | |
IHOP Corp. (d)(e) | 928,011 | 49,407 | |
McDonald's Corp. | 3,797,500 | 203,356 | |
Starbucks Corp. (a) | 5,109,400 | 96,619 | |
Yum! Brands, Inc. | 3,926,900 | 134,143 | |
561,712 | |||
Household Durables - 2.8% | |||
Centex Corp. | 3,788,800 | 105,253 | |
D.R. Horton, Inc. | 1,419,300 | 24,483 | |
Furniture Brands International, Inc. (d)(e) | 4,368,495 | 41,719 | |
KB Home | 1,607,300 | 44,201 | |
La-Z-Boy, Inc. (d)(e) | 4,874,100 | 37,141 | |
Lennar Corp. Class A (d) | 1,072,500 | 22,094 | |
Ryland Group, Inc. (d) | 1,787,600 | 60,260 | |
Sony Corp. sponsored ADR | 1,489,200 | 70,722 | |
405,873 | |||
Internet & Catalog Retail - 1.1% | |||
Amazon.com, Inc. (a)(d) | 2,090,500 | 162,432 | |
Leisure Equipment & Products - 0.0% | |||
Brunswick Corp. | 48,900 | 929 | |
Media - 1.5% | |||
E.W. Scripps Co. Class A | 2,118,301 | 86,257 | |
Interpublic Group of Companies, Inc. (a)(d) | 10,053,200 | 89,775 | |
Lamar Advertising Co. Class A (d) | 899,600 | 38,791 | |
214,823 | |||
Multiline Retail - 0.7% | |||
Kohl's Corp. (a) | 2,287,900 | 104,420 | |
Specialty Retail - 3.1% | |||
Bed Bath & Beyond, Inc. (a) | 1,939,100 | 62,517 | |
Guess?, Inc. | 3,042,900 | 113,531 | |
Home Depot, Inc. | 4,408,600 | 135,212 | |
J. Crew Group, Inc. (a)(d) | 1,049,929 | 48,003 | |
Lowe's Companies, Inc. | 1,802,700 | 47,663 | |
Williams-Sonoma, Inc. | 1,632,700 | 43,887 | |
450,813 | |||
Textiles, Apparel & Luxury Goods - 2.2% | |||
NIKE, Inc. Class B (d) | 2,355,900 | 145,500 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Phillips-Van Heusen Corp. | 1,903,800 | $ 80,226 | |
Polo Ralph Lauren Corp. Class A | 312,400 | 18,928 | |
Under Armour, Inc. Class A (sub. vtg.) (a)(d) | 1,962,500 | 78,991 | |
323,645 | |||
TOTAL CONSUMER DISCRETIONARY | 2,224,647 | ||
CONSUMER STAPLES - 12.3% | |||
Beverages - 3.8% | |||
PepsiCo, Inc. | 2,366,862 | 161,396 | |
The Coca-Cola Co. | 6,670,300 | 394,682 | |
556,078 | |||
Food & Staples Retailing - 3.8% | |||
Kroger Co. | 4,523,000 | 115,110 | |
Safeway, Inc. | 3,022,800 | 93,677 | |
Sysco Corp. | 3,948,400 | 114,701 | |
Wal-Mart Stores, Inc. | 4,490,155 | 228,459 | |
551,947 | |||
Food Products - 1.0% | |||
Nestle SA sponsored ADR | 1,000,800 | 112,540 | |
Unilever NV (NY Shares) | 1,271,400 | 41,346 | |
153,886 | |||
Household Products - 2.6% | |||
Church & Dwight Co., Inc. | 997,900 | 53,108 | |
Procter & Gamble Co. | 3,681,430 | 242,790 | |
Reckitt Benckiser Group PLC | 1,473,200 | 77,168 | |
373,066 | |||
Personal Products - 1.1% | |||
Avon Products, Inc. | 2,044,000 | 71,581 | |
Estee Lauder Companies, Inc. Class A | 2,094,200 | 88,375 | |
159,956 | |||
TOTAL CONSUMER STAPLES | 1,794,933 | ||
ENERGY - 9.3% | |||
Energy Equipment & Services - 4.2% | |||
Compagnie Generale de Geophysique SA (a) | 156,100 | 36,521 | |
FMC Technologies, Inc. (a) | 836,800 | 40,300 | |
Fugro NV (Certificaten Van Aandelen) unit | 608,800 | 41,735 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - continued | |||
Energy Equipment & Services - continued | |||
Nabors Industries Ltd. (a) | 1,200,400 | $ 32,675 | |
National Oilwell Varco, Inc. (a) | 1,195,600 | 72,011 | |
Oceaneering International, Inc. (a) | 1,156,385 | 66,585 | |
Schlumberger Ltd. (NY Shares) | 3,420,800 | 258,134 | |
Transocean, Inc. (a) | 342,440 | 41,983 | |
Weatherford International Ltd. (a) | 467,800 | 28,915 | |
618,859 | |||
Oil, Gas & Consumable Fuels - 5.1% | |||
Chesapeake Energy Corp. | 1,357,500 | 50,540 | |
Enterprise Products Partners LP | 862,900 | 26,931 | |
Exxon Mobil Corp. | 4,942,800 | 427,058 | |
Hess Corp. | 524,700 | 47,659 | |
Newfield Exploration Co. (a) | 394,900 | 19,698 | |
Peabody Energy Corp. | 822,700 | 44,442 | |
Sasol Ltd. sponsored ADR | 1,653,700 | 79,460 | |
Southwestern Energy Co. (a) | 848,000 | 47,412 | |
743,200 | |||
TOTAL ENERGY | 1,362,059 | ||
FINANCIALS - 8.9% | |||
Capital Markets - 3.4% | |||
Charles Schwab Corp. | 6,137,900 | 136,875 | |
Janus Capital Group, Inc. | 3,268,700 | 88,288 | |
Merrill Lynch & Co., Inc. | 2,627,000 | 148,163 | |
T. Rowe Price Group, Inc. | 2,493,481 | 126,145 | |
499,471 | |||
Commercial Banks - 0.1% | |||
Fifth Third Bancorp | 142,700 | 3,867 | |
M&T Bank Corp. (d) | 169,100 | 15,518 | |
19,385 | |||
Consumer Finance - 0.6% | |||
Capital One Financial Corp. | 1,619,000 | 88,737 | |
Diversified Financial Services - 1.8% | |||
Bovespa Holding SA | 1,598,500 | 23,473 | |
CME Group, Inc. | 236,263 | 146,223 | |
Deutsche Boerse AG | 528,900 | 92,561 | |
262,257 | |||
Common Stocks - continued | |||
Shares | Value (000s) | ||
FINANCIALS - continued | |||
Insurance - 3.0% | |||
ACE Ltd. | 1,328,300 | $ 77,493 | |
AFLAC, Inc. | 2,103,000 | 128,977 | |
American International Group, Inc. | 320,155 | 17,660 | |
Fidelity National Financial, Inc. Class A | 963,600 | 18,973 | |
First American Corp., California | 457,450 | 19,922 | |
Principal Financial Group, Inc. | 1,677,600 | 100,002 | |
Prudential Financial, Inc. | 813,700 | 68,652 | |
431,679 | |||
TOTAL FINANCIALS | 1,301,529 | ||
HEALTH CARE - 14.6% | |||
Biotechnology - 3.9% | |||
Celgene Corp. (a) | 1,660,200 | 93,154 | |
CSL Ltd. | 2,972,832 | 91,057 | |
Genentech, Inc. (a) | 2,718,800 | 190,833 | |
Gilead Sciences, Inc. (a) | 4,228,900 | 193,218 | |
568,262 | |||
Health Care Equipment & Supplies - 4.1% | |||
Alcon, Inc. | 648,800 | 92,130 | |
Becton, Dickinson & Co. | 2,094,570 | 181,243 | |
C.R. Bard, Inc. | 722,500 | 69,772 | |
Medtronic, Inc. | 4,160,800 | 193,768 | |
Sonova Holding AG | 751,819 | 67,202 | |
604,115 | |||
Health Care Providers & Services - 1.3% | |||
UnitedHealth Group, Inc. | 3,705,000 | 188,362 | |
Life Sciences Tools & Services - 0.5% | |||
Thermo Fisher Scientific, Inc. (a) | 1,260,300 | 64,893 | |
Pharmaceuticals - 4.8% | |||
Allergan, Inc. | 1,178,900 | 79,210 | |
Merck & Co., Inc. | 7,754,100 | 358,860 | |
Pronova BioPharma ASA | 8,661,803 | 31,385 | |
Schering-Plough Corp. | 8,824,500 | 172,695 | |
Wyeth | 1,545,700 | 61,519 | |
703,669 | |||
TOTAL HEALTH CARE | 2,129,301 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - 5.1% | |||
Aerospace & Defense - 2.9% | |||
Honeywell International, Inc. | 733,500 | $ 43,328 | |
Lockheed Martin Corp. | 1,730,600 | 186,766 | |
Raytheon Co. | 2,282,600 | 148,689 | |
United Technologies Corp. | 688,300 | 50,528 | |
429,311 | |||
Building Products - 0.3% | |||
Masco Corp. | 1,839,600 | 42,182 | |
Construction & Engineering - 0.2% | |||
KBR, Inc. (a) | 882,200 | 27,869 | |
Electrical Equipment - 0.2% | |||
Renewable Energy Corp. AS (a)(d) | 887,100 | 23,191 | |
Vestas Wind Systems AS (a) | 100 | 10 | |
23,201 | |||
Industrial Conglomerates - 1.2% | |||
General Electric Co. | 2,352,700 | 83,309 | |
Siemens AG sponsored ADR | 721,600 | 93,664 | |
176,973 | |||
Machinery - 0.3% | |||
Danaher Corp. | 533,100 | 39,689 | |
TOTAL INDUSTRIALS | 739,225 | ||
INFORMATION TECHNOLOGY - 30.7% | |||
Communications Equipment - 5.1% | |||
Cisco Systems, Inc. (a) | 22,049,300 | 540,208 | |
Research In Motion Ltd. (a) | 2,090,500 | 196,256 | |
736,464 | |||
Computers & Peripherals - 7.9% | |||
Apple, Inc. (a) | 2,244,300 | 303,788 | |
EMC Corp. (a) | 9,761,200 | 154,910 | |
Hewlett-Packard Co. | 7,110,200 | 311,071 | |
International Business Machines Corp. | 3,617,000 | 388,249 | |
1,158,018 | |||
Electronic Equipment & Instruments - 1.1% | |||
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 15,662,680 | 84,073 | |
Tyco Electronics Ltd. | 2,362,825 | 79,887 | |
163,960 | |||
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Internet Software & Services - 2.9% | |||
Google, Inc. Class A (sub. vtg.) (a) | 748,600 | $ 422,435 | |
IT Services - 2.8% | |||
Accenture Ltd. Class A | 2,644,600 | 91,556 | |
Cognizant Technology Solutions Corp. Class A (a) | 1,992,340 | 55,586 | |
Infosys Technologies Ltd. sponsored ADR | 1,412,300 | 58,469 | |
Satyam Computer Services Ltd. sponsored ADR | 2,560,900 | 62,358 | |
The Western Union Co. | 6,211,200 | 139,131 | |
407,100 | |||
Semiconductors & Semiconductor Equipment - 4.0% | |||
Applied Materials, Inc. | 4,691,100 | 84,065 | |
Intel Corp. | 15,871,640 | 336,479 | |
Maxim Integrated Products, Inc. | 1,836,500 | 36,106 | |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 13,126,578 | 121,815 | |
578,465 | |||
Software - 6.9% | |||
Microsoft Corp. | 21,546,400 | 702,411 | |
Oracle Corp. (a) | 11,607,400 | 238,532 | |
Take-Two Interactive Software, Inc. (a)(d) | 3,524,100 | 57,936 | |
VMware, Inc. Class A (d) | 67,300 | 3,813 | |
1,002,692 | |||
TOTAL INFORMATION TECHNOLOGY | 4,469,134 | ||
MATERIALS - 1.8% | |||
Chemicals - 1.5% | |||
Monsanto Co. | 1,457,400 | 163,870 | |
Praxair, Inc. | 810,900 | 65,610 | |
229,480 | |||
Metals & Mining - 0.3% | |||
ArcelorMittal SA (NY Reg.) Class A | 634,100 | 42,098 | |
TOTAL MATERIALS | 271,578 | ||
TELECOMMUNICATION SERVICES - 0.5% | |||
Wireless Telecommunication Services - 0.5% | |||
Vodafone Group PLC sponsored ADR | 2,077,900 | 72,311 | |
UTILITIES - 1.4% | |||
Electric Utilities - 1.2% | |||
Allegheny Energy, Inc. | 261,600 | 14,333 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
UTILITIES - continued | |||
Electric Utilities - continued | |||
E.ON AG sponsored ADR | 1,156,100 | $ 70,927 | |
Electricite de France | 679,200 | 70,850 | |
PPL Corp. | 307,100 | 15,023 | |
171,133 | |||
Independent Power Producers & Energy Traders - 0.2% | |||
AES Corp. (a) | 1,521,400 | 29,028 | |
TOTAL UTILITIES | 200,161 | ||
TOTAL COMMON STOCKS (Cost $12,819,098) | 14,564,878 | ||
Money Market Funds - 2.5% | |||
Fidelity Cash Central Fund, 3.79% (b) | 90,471,425 | 90,471 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 279,289,000 | 279,289 | |
TOTAL MONEY MARKET FUNDS (Cost $369,760) | 369,760 | ||
Cash Equivalents - 0.1% | |||
Maturity Amount (000s) | |||
Investments in repurchase agreements in a joint trading account at 1.69%, dated 1/31/08 due 2/1/08 (Collateralized by U.S. Treasury Obligations) # | $ 8,180 | 8,180 | |
TOTAL INVESTMENT PORTFOLIO - 102.5% (Cost $13,197,038) | 14,942,818 | ||
NET OTHER ASSETS - (2.5)% | (368,660) | ||
NET ASSETS - 100% | $ 14,574,158 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$8,180,000 due 2/01/08 at 1.69% | |
Banc of America Securities LLC | $ 1,786 |
Barclays Capital, Inc. | 2,575 |
ING Financial Markets LLC | 3,819 |
$ 8,180 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned (Amounts in thousands) |
Fidelity Cash Central Fund | $ 1,636 |
Fidelity Securities Lending Cash Central Fund | 2,282 |
Total | $ 3,918 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
AMN Healthcare Services, Inc. | $ 69,129 | $ - | $ 57,131 | $ - | $ - |
Cross Country Healthcare, Inc. | 50,352 | - | 44,669 | - | - |
Furniture Brands International, Inc. | 19,283 | 23,517 | 610 | 554 | 41,719 |
IHOP Corp. | 24,601 | 36,368 | 629 | 468 | 49,407 |
La-Z-Boy, Inc. | 45,787 | 2,154 | - | 1,134 | 37,141 |
Nastech Pharmaceutical Co., Inc. | 26,132 | - | 7,684 | - | - |
Total | $ 235,284 | $ 62,039 | $ 110,723 | $ 2,156 | $ 128,267 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 84.6% |
Switzerland | 1.8% |
Netherlands Antilles | 1.8% |
Germany | 1.7% |
Taiwan | 1.4% |
Canada | 1.4% |
Bermuda | 1.1% |
United Kingdom | 1.0% |
Others (individually less than 1%) | 5.2% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $284,521 and repurchase agreements of $8,180) - See accompanying schedule: Unaffiliated issuers (cost $12,658,307) | $ 14,444,791 | |
Fidelity Central Funds (cost $369,760) | 369,760 | |
Other affiliated issuers (cost $168,971) | 128,267 | |
Total Investments (cost $13,197,038) | $ 14,942,818 | |
Receivable for fund shares sold | 10,367 | |
Dividends receivable | 7,816 | |
Distributions receivable from Fidelity Central Funds | 831 | |
Prepaid expenses | 53 | |
Other receivables | 600 | |
Total assets | 14,962,485 | |
Liabilities | ||
Payable to custodian bank | $ 9 | |
Payable for investments purchased | 87,024 | |
Payable for fund shares redeemed | 14,219 | |
Accrued management fee | 3,546 | |
Other affiliated payables | 3,274 | |
Other payables and accrued expenses | 966 | |
Collateral on securities loaned, at value | 279,289 | |
Total liabilities | 388,327 | |
Net Assets | $ 14,574,158 | |
Net Assets consist of: | ||
Paid in capital | $ 12,660,111 | |
Undistributed net investment income | 10,476 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 157,781 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,745,790 | |
Net Assets, for 363,464 shares outstanding | $ 14,574,158 | |
Net Asset Value, offering price and redemption price per share ($14,574,158 ÷ 363,464 shares) | $ 40.10 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended January 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends (including $2,156 earned from other affiliated issuers) | $ 107,824 | |
Interest | 17 | |
Income from Fidelity Central Funds | 3,918 | |
Total income | 111,759 | |
Expenses | ||
Management fee | $ 48,501 | |
Performance adjustment | (20,669) | |
Transfer agent fees | 19,861 | |
Accounting and security lending fees | 830 | |
Custodian fees and expenses | 187 | |
Independent trustees' compensation | 37 | |
Registration fees | 36 | |
Audit | 59 | |
Legal | 220 | |
Interest | 214 | |
Miscellaneous | 536 | |
Total expenses before reductions | 49,812 | |
Expense reductions | (833) | 48,979 |
Net investment income (loss) | 62,780 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 700,985 | |
Other affiliated issuers | (77,688) | |
Foreign currency transactions | (469) | |
Total net realized gain (loss) | 622,828 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (1,088,895) | |
Assets and liabilities in foreign currencies | 9 | |
Total change in net unrealized appreciation (depreciation) | (1,088,886) | |
Net gain (loss) | (466,058) | |
Net increase (decrease) in net assets resulting from operations | $ (403,278) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 62,780 | $ 145,297 |
Net realized gain (loss) | 622,828 | 1,625,665 |
Change in net unrealized appreciation (depreciation) | (1,088,886) | 1,230,855 |
Net increase (decrease) in net assets resulting | (403,278) | 3,001,817 |
Distributions to shareholders from net investment income | (124,380) | (110,618) |
Distributions to shareholders from net realized gain | (1,882,106) | (430,992) |
Total distributions | (2,006,486) | (541,610) |
Share transactions | 857,745 | 2,670,983 |
Reinvestment of distributions | 1,982,160 | 535,074 |
Cost of shares redeemed | (4,472,256) | (6,620,849) |
Net increase (decrease) in net assets resulting from share transactions | (1,632,351) | (3,414,792) |
Total increase (decrease) in net assets | (4,042,115) | (954,585) |
Net Assets | ||
Beginning of period | 18,616,273 | 19,570,858 |
End of period (including undistributed net investment income of $10,476 and undistributed net investment income of $82,288, respectively) | $ 14,574,158 | $ 18,616,273 |
Other Information Shares | ||
Sold | 19,155 | 59,925 |
Issued in reinvestment of distributions | 45,780 | 12,779 |
Redeemed | (98,616) | (146,659) |
Net increase (decrease) | (33,681) | (73,955) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Blue Chip Growth Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustee compensation, and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,406,355 |
Unrealized depreciation | (735,096) |
Net unrealized appreciation (depreciation) | $ 1,671,259 |
Cost for federal income tax purposes | $ 13,271,559 |
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $8,015,943 and $11,444,804, respectively.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .32% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .23% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the Fund's transfer agent.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $107 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Interfund Lending Program - continued
The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest |
Borrower | $ 43,844 | 4.74% | $ 214 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $25 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $2,282.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
9. Expense Reductions - continued
certain expenses on behalf of the Fund totaling $221 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $6 and $606, respectively.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $1,191.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Semiannual Report
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Semiannual Report
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Fidelity Management & Research Company
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Investment Sub-Advisers
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Fidelity®
Blue Chip Value
Fund
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past 6 months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 947.80 | $ 4.41 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.61 | $ 4.57 |
* Expenses are equal to the Fund's annualized expense ratio of .90%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Bank of America Corp. | 4.9 | 4.6 |
ConocoPhillips | 4.5 | 4.2 |
AT&T, Inc. | 3.7 | 5.0 |
American International Group, Inc. | 3.7 | 3.5 |
JPMorgan Chase & Co. | 3.3 | 2.6 |
General Electric Co. | 3.0 | 3.2 |
Exxon Mobil Corp. | 2.5 | 2.5 |
Procter & Gamble Co. | 2.4 | 2.1 |
Citigroup, Inc. | 2.3 | 4.2 |
Verizon Communications, Inc. | 2.0 | 1.3 |
32.3 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Financials | 30.4 | 31.3 |
Energy | 17.1 | 15.9 |
Industrials | 9.7 | 10.3 |
Consumer Discretionary | 7.9 | 7.8 |
Consumer Staples | 7.1 | 7.3 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 99.4% | ![]() | Stocks 99.6% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 12.6% | ** Foreign investments | 12.8% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.4% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 7.9% | |||
Automobiles - 0.2% | |||
Renault SA | 13,000 | $ 1,484,024 | |
Diversified Consumer Services - 0.3% | |||
H&R Block, Inc. | 90,100 | 1,736,227 | |
Hotels, Restaurants & Leisure - 0.4% | |||
McDonald's Corp. | 42,900 | 2,297,295 | |
Household Durables - 2.2% | |||
Bassett Furniture Industries, Inc. | 39,800 | 518,594 | |
Black & Decker Corp. | 32,300 | 2,343,042 | |
Centex Corp. | 87,200 | 2,422,416 | |
KB Home | 252,900 | 6,954,750 | |
Whirlpool Corp. | 15,200 | 1,293,672 | |
13,532,474 | |||
Leisure Equipment & Products - 0.7% | |||
Brunswick Corp. | 52,400 | 995,076 | |
Eastman Kodak Co. | 76,200 | 1,518,666 | |
Mattel, Inc. | 82,400 | 1,731,224 | |
4,244,966 | |||
Media - 1.5% | |||
News Corp. Class A | 161,600 | 3,054,240 | |
Regal Entertainment Group Class A | 96,400 | 1,787,256 | |
Time Warner, Inc. | 264,700 | 4,166,378 | |
9,007,874 | |||
Multiline Retail - 0.4% | |||
Sears Holdings Corp. (a) | 24,200 | 2,673,858 | |
Specialty Retail - 2.0% | |||
Advance Auto Parts, Inc. | 49,200 | 1,755,456 | |
Home Depot, Inc. | 57,100 | 1,751,257 | |
PetSmart, Inc. | 63,200 | 1,445,384 | |
Ross Stores, Inc. | 89,400 | 2,606,010 | |
Staples, Inc. | 112,400 | 2,690,856 | |
Williams-Sonoma, Inc. | 75,100 | 2,018,688 | |
12,267,651 | |||
Textiles, Apparel & Luxury Goods - 0.2% | |||
Liz Claiborne, Inc. | 56,100 | 1,228,029 | |
TOTAL CONSUMER DISCRETIONARY | 48,472,398 | ||
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER STAPLES - 7.1% | |||
Beverages - 0.2% | |||
Molson Coors Brewing Co. Class B | 31,900 | $ 1,424,973 | |
Food & Staples Retailing - 1.0% | |||
CVS Caremark Corp. | 75,000 | 2,930,250 | |
SUPERVALU, Inc. | 52,200 | 1,569,132 | |
Winn-Dixie Stores, Inc. (a) | 98,862 | 1,751,835 | |
6,251,217 | |||
Food Products - 1.7% | |||
Cermaq ASA | 65,800 | 675,159 | |
Chiquita Brands International, Inc. (a) | 84,900 | 1,585,932 | |
Marine Harvest ASA (a) | 1,558,000 | 839,219 | |
Nestle SA (Reg.) | 15,608 | 7,020,478 | |
10,120,788 | |||
Household Products - 2.5% | |||
Procter & Gamble Co. | 226,600 | 14,944,270 | |
Tobacco - 1.7% | |||
Altria Group, Inc. | 76,900 | 5,830,558 | |
British American Tobacco PLC sponsored ADR | 66,700 | 4,689,010 | |
10,519,568 | |||
TOTAL CONSUMER STAPLES | 43,260,816 | ||
ENERGY - 17.1% | |||
Energy Equipment & Services - 2.0% | |||
Expro International Group PLC | 63,800 | 1,183,220 | |
Exterran Holdings, Inc. (a) | 16,835 | 1,098,315 | |
Nabors Industries Ltd. (a) | 125,132 | 3,406,093 | |
National Oilwell Varco, Inc. (a) | 61,714 | 3,717,034 | |
Transocean, Inc. (a) | 21,355 | 2,618,123 | |
12,022,785 | |||
Oil, Gas & Consumable Fuels - 15.1% | |||
Chesapeake Energy Corp. | 56,700 | 2,110,941 | |
ConocoPhillips (d) | 346,200 | 27,806,784 | |
CONSOL Energy, Inc. | 61,300 | 4,474,900 | |
EnCana Corp. | 28,300 | 1,866,551 | |
EOG Resources, Inc. | 83,400 | 7,297,500 | |
EXCO Resources, Inc. (a) | 107,900 | 1,617,421 | |
Exxon Mobil Corp. | 173,400 | 14,981,760 | |
Hess Corp. | 25,300 | 2,297,999 | |
Occidental Petroleum Corp. | 127,700 | 8,666,999 | |
Common Stocks - continued | |||
Shares | Value | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Quicksilver Resources, Inc. (a) | 49,150 | $ 2,793,195 | |
Suncor Energy, Inc. | 30,000 | 2,821,982 | |
Ultra Petroleum Corp. (a) | 97,200 | 6,687,360 | |
Uranium One, Inc. (a) | 85,700 | 596,070 | |
Valero Energy Corp. | 141,100 | 8,351,709 | |
92,371,171 | |||
TOTAL ENERGY | 104,393,956 | ||
FINANCIALS - 30.4% | |||
Capital Markets - 5.9% | |||
Ares Capital Corp. | 84,900 | 1,186,902 | |
Bear Stearns Companies, Inc. (d) | 43,600 | 3,937,080 | |
Charles Schwab Corp. | 69,732 | 1,555,024 | |
Franklin Resources, Inc. | 21,300 | 2,220,099 | |
Goldman Sachs Group, Inc. | 25,400 | 5,099,558 | |
Julius Baer Holding AG | 27,054 | 1,900,216 | |
KKR Private Equity Investors, LP | 128,479 | 2,152,023 | |
KKR Private Equity Investors, LP Restricted Depositary Units (e) | 7,700 | 128,975 | |
Legg Mason, Inc. | 22,100 | 1,591,200 | |
Lehman Brothers Holdings, Inc. | 182,900 | 11,736,693 | |
State Street Corp. | 35,044 | 2,877,813 | |
T. Rowe Price Group, Inc. | 32,300 | 1,634,057 | |
36,019,640 | |||
Commercial Banks - 2.0% | |||
Associated Banc-Corp. | 51,037 | 1,438,223 | |
HSBC Holdings PLC sponsored ADR | 33,100 | 2,488,458 | |
Siam City Bank PCL NVDR | 264,900 | 113,082 | |
Sterling Financial Corp., Washington | 65,900 | 1,172,361 | |
UniCredit SpA | 219,300 | 1,619,606 | |
Wachovia Corp. | 140,442 | 5,467,407 | |
12,299,137 | |||
Consumer Finance - 0.7% | |||
Capital One Financial Corp. | 45,500 | 2,493,855 | |
Discover Financial Services | 106,600 | 1,865,500 | |
4,359,355 | |||
Diversified Financial Services - 10.5% | |||
Bank of America Corp. | 680,716 | 30,189,755 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Diversified Financial Services - continued | |||
Citigroup, Inc. | 499,400 | $ 14,093,068 | |
JPMorgan Chase & Co. | 420,152 | 19,978,228 | |
64,261,051 | |||
Insurance - 7.9% | |||
ACE Ltd. | 97,380 | 5,681,149 | |
Admiral Group PLC | 56,800 | 1,119,262 | |
AMBAC Financial Group, Inc. | 22,915 | 268,564 | |
American International Group, Inc. | 406,800 | 22,439,088 | |
Argo Group International Holdings, Ltd. (a) | 42,988 | 1,755,630 | |
Hartford Financial Services Group, Inc. | 51,500 | 4,159,655 | |
IPC Holdings Ltd. | 102,032 | 2,625,283 | |
LandAmerica Financial Group, Inc. | 26,700 | 1,392,672 | |
MBIA, Inc. | 37,900 | 587,450 | |
Montpelier Re Holdings Ltd. | 88,200 | 1,511,748 | |
Principal Financial Group, Inc. | 45,900 | 2,736,099 | |
The Travelers Companies, Inc. | 79,400 | 3,819,140 | |
48,095,740 | |||
Real Estate Investment Trusts - 1.1% | |||
Alexandria Real Estate Equities, Inc. | 22,600 | 2,219,998 | |
Annaly Capital Management, Inc. | 99,200 | 1,956,224 | |
General Growth Properties, Inc. | 31,600 | 1,154,032 | |
Home Properties, Inc. | 32,000 | 1,535,680 | |
6,865,934 | |||
Real Estate Management & Development - 0.6% | |||
CB Richard Ellis Group, Inc. Class A (a) | 178,200 | 3,458,862 | |
Thrifts & Mortgage Finance - 1.7% | |||
Countrywide Financial Corp. | 55,600 | 386,976 | |
Fannie Mae | 103,940 | 3,519,408 | |
FirstFed Financial Corp. (a)(d) | 42,200 | 1,770,290 | |
New York Community Bancorp, Inc. | 116,700 | 2,164,785 | |
Washington Federal, Inc. | 98,536 | 2,406,249 | |
10,247,708 | |||
TOTAL FINANCIALS | 185,607,427 | ||
HEALTH CARE - 5.7% | |||
Biotechnology - 1.2% | |||
Amgen, Inc. (a) | 103,600 | 4,826,724 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Biotechnology - continued | |||
Biogen Idec, Inc. (a) | 24,300 | $ 1,481,085 | |
Cephalon, Inc. (a) | 20,500 | 1,345,415 | |
7,653,224 | |||
Health Care Equipment & Supplies - 2.0% | |||
Becton, Dickinson & Co. | 17,500 | 1,514,275 | |
Boston Scientific Corp. (a) | 147,400 | 1,787,962 | |
C.R. Bard, Inc. | 18,400 | 1,776,888 | |
Covidien Ltd. | 68,085 | 3,038,634 | |
Medtronic, Inc. | 84,400 | 3,930,508 | |
12,048,267 | |||
Life Sciences Tools & Services - 0.2% | |||
Thermo Fisher Scientific, Inc. (a) | 29,600 | 1,524,104 | |
Pharmaceuticals - 2.3% | |||
Johnson & Johnson | 86,200 | 5,453,012 | |
Merck & Co., Inc. | 112,400 | 5,201,872 | |
Schering-Plough Corp. | 73,900 | 1,446,223 | |
Wyeth | 44,100 | 1,755,180 | |
13,856,287 | |||
TOTAL HEALTH CARE | 35,081,882 | ||
INDUSTRIALS - 9.7% | |||
Aerospace & Defense - 2.6% | |||
Honeywell International, Inc. | 116,060 | 6,855,664 | |
Raytheon Co. | 28,600 | 1,863,004 | |
United Technologies Corp. | 94,300 | 6,922,563 | |
15,641,231 | |||
Air Freight & Logistics - 0.4% | |||
United Parcel Service, Inc. Class B | 32,200 | 2,355,752 | |
Airlines - 0.2% | |||
Delta Air Lines, Inc. (a) | 60,900 | 1,024,947 | |
US Airways Group, Inc. (a) | 26,200 | 361,822 | |
1,386,769 | |||
Building Products - 0.2% | |||
Masco Corp. | 56,700 | 1,300,131 | |
Commercial Services & Supplies - 0.7% | |||
Allied Waste Industries, Inc. (a) | 200,400 | 1,973,940 | |
The Brink's Co. | 39,700 | 2,407,011 | |
4,380,951 | |||
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Construction & Engineering - 0.2% | |||
URS Corp. (a) | 32,100 | $ 1,409,190 | |
Industrial Conglomerates - 3.7% | |||
General Electric Co. | 509,850 | 18,053,789 | |
Siemens AG sponsored ADR | 33,700 | 4,374,260 | |
22,428,049 | |||
Machinery - 0.8% | |||
Ingersoll-Rand Co. Ltd. Class A | 46,600 | 1,841,632 | |
Oshkosh Truck Co. | 37,700 | 1,725,152 | |
Sulzer AG (Reg.) | 1,185 | 1,253,090 | |
4,819,874 | |||
Road & Rail - 0.9% | |||
Knight Transportation, Inc. | 171,000 | 2,934,360 | |
Ryder System, Inc. | 46,300 | 2,410,378 | |
5,344,738 | |||
TOTAL INDUSTRIALS | 59,066,685 | ||
INFORMATION TECHNOLOGY - 5.8% | |||
Communications Equipment - 0.7% | |||
Alcatel-Lucent SA sponsored ADR | 147,300 | 932,409 | |
Comverse Technology, Inc. (a) | 68,700 | 1,123,245 | |
Motorola, Inc. | 185,300 | 2,136,509 | |
4,192,163 | |||
Computers & Peripherals - 2.0% | |||
Hewlett-Packard Co. | 179,300 | 7,844,375 | |
International Business Machines Corp. | 24,900 | 2,672,766 | |
NCR Corp. (a) | 78,100 | 1,677,588 | |
12,194,729 | |||
Electronic Equipment & Instruments - 1.4% | |||
Agilent Technologies, Inc. (a) | 52,400 | 1,776,884 | |
Amphenol Corp. Class A | 9,400 | 375,436 | |
Avnet, Inc. (a) | 53,100 | 1,890,891 | |
Flextronics International Ltd. (a) | 138,100 | 1,615,770 | |
Motech Industries, Inc. | 191,713 | 1,144,579 | |
Tyco Electronics Ltd. | 57,585 | 1,946,949 | |
8,750,509 | |||
Internet Software & Services - 0.3% | |||
VeriSign, Inc. (a) | 50,000 | 1,696,000 | |
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
IT Services - 0.5% | |||
The Western Union Co. | 85,600 | $ 1,917,440 | |
Unisys Corp. (a) | 255,300 | 1,062,048 | |
2,979,488 | |||
Semiconductors & Semiconductor Equipment - 0.9% | |||
Analog Devices, Inc. | 33,800 | 958,568 | |
Applied Materials, Inc. | 79,500 | 1,424,640 | |
Atmel Corp. (a) | 156,200 | 493,592 | |
Maxim Integrated Products, Inc. | 61,000 | 1,199,260 | |
Novellus Systems, Inc. (a) | 55,400 | 1,316,304 | |
ON Semiconductor Corp. (a) | 23,100 | 149,688 | |
5,542,052 | |||
TOTAL INFORMATION TECHNOLOGY | 35,354,941 | ||
MATERIALS - 3.7% | |||
Chemicals - 0.6% | |||
Agrium, Inc. | 23,400 | 1,509,557 | |
Albemarle Corp. | 45,290 | 1,642,215 | |
Chemtura Corp. | 93,500 | 626,450 | |
3,778,222 | |||
Containers & Packaging - 0.1% | |||
Temple-Inland, Inc. | 35,600 | 667,500 | |
Metals & Mining - 3.0% | |||
Alcoa, Inc. | 114,500 | 3,789,950 | |
Allegheny Technologies, Inc. | 11,900 | 837,760 | |
ArcelorMittal SA (NY Reg.) Class A | 36,500 | 2,423,235 | |
Carpenter Technology Corp. | 30,700 | 1,892,348 | |
Freeport-McMoRan Copper & Gold, Inc. Class B | 28,000 | 2,492,840 | |
Goldcorp, Inc. | 28,300 | 1,052,984 | |
Lihir Gold Ltd. (a) | 448,526 | 1,496,076 | |
Newcrest Mining Ltd. | 53,491 | 1,675,337 | |
Randgold Resources Ltd. sponsored ADR | 29,400 | 1,402,674 | |
Reliance Steel & Aluminum Co. | 25,400 | 1,249,934 | |
18,313,138 | |||
TOTAL MATERIALS | 22,758,860 | ||
TELECOMMUNICATION SERVICES - 6.6% | |||
Diversified Telecommunication Services - 6.4% | |||
AT&T, Inc. | 587,710 | 22,620,958 | |
Common Stocks - continued | |||
Shares | Value | ||
TELECOMMUNICATION SERVICES - continued | |||
Diversified Telecommunication Services - continued | |||
Cincinnati Bell, Inc. (a) | 308,800 | $ 1,198,144 | |
Embarq Corp. | 27,400 | 1,241,220 | |
Qwest Communications International, Inc. | 314,100 | 1,846,908 | |
Verizon Communications, Inc. | 318,273 | 12,361,723 | |
39,268,953 | |||
Wireless Telecommunication Services - 0.2% | |||
American Tower Corp. Class A (a) | 35,200 | 1,321,056 | |
TOTAL TELECOMMUNICATION SERVICES | 40,590,009 | ||
UTILITIES - 5.4% | |||
Electric Utilities - 2.9% | |||
E.ON AG sponsored ADR | 31,000 | 1,901,850 | |
Edison International | 48,300 | 2,519,328 | |
Entergy Corp. | 50,600 | 5,473,908 | |
PPL Corp. | 95,300 | 4,662,076 | |
Reliant Energy, Inc. (a) | 135,000 | 2,871,450 | |
17,428,612 | |||
Independent Power Producers & Energy Traders - 1.9% | |||
AES Corp. (a) | 100,800 | 1,923,264 | |
Constellation Energy Group, Inc. | 76,000 | 7,140,960 | |
NRG Energy, Inc. (a) | 71,800 | 2,770,762 | |
11,834,986 | |||
Multi-Utilities - 0.6% | |||
CMS Energy Corp. | 101,900 | 1,596,773 | |
Sempra Energy | 36,000 | 2,012,400 | |
3,609,173 | |||
TOTAL UTILITIES | 32,872,771 | ||
TOTAL COMMON STOCKS (Cost $605,459,636) | 607,459,745 | ||
Money Market Funds - 3.2% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 4,299,733 | $ 4,299,733 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 15,213,100 | 15,213,100 | |
TOTAL MONEY MARKET FUNDS (Cost $19,512,833) | 19,512,833 | ||
TOTAL INVESTMENT PORTFOLIO - 102.6% (Cost $624,972,469) | 626,972,578 | ||
NET OTHER ASSETS - (2.6)% | (15,713,977) | ||
NET ASSETS - 100% | $ 611,258,601 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $128,975 or 0.0% of net assets. |
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 | $ 62,203 |
Fidelity Securities Lending Cash Central Fund | 66,432 |
Total | $ 128,635 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 87.4% |
Canada | 2.4% |
United Kingdom | 2.1% |
Bermuda | 2.1% |
Switzerland | 1.7% |
Germany | 1.0% |
Others (individually less than 1%) | 3.3% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $15,147,508) - See accompanying schedule: Unaffiliated issuers (cost $605,459,636) | $ 607,459,745 | |
Fidelity Central Funds (cost $19,512,833) | 19,512,833 | |
Total Investments (cost $624,972,469) | $ 626,972,578 | |
Receivable for investments sold | 514,024 | |
Receivable for fund shares sold | 738,374 | |
Dividends receivable | 885,092 | |
Distributions receivable from Fidelity Central Funds | 15,092 | |
Prepaid expenses | 2,127 | |
Other receivables | 1,661 | |
Total assets | 629,128,948 | |
Liabilities | ||
Payable for investments purchased | $ 1,224,517 | |
Payable for fund shares redeemed | 928,354 | |
Accrued management fee | 282,061 | |
Other affiliated payables | 172,017 | |
Other payables and accrued expenses | 50,298 | |
Collateral on securities loaned, at value | 15,213,100 | |
Total liabilities | 17,870,347 | |
Net Assets | $ 611,258,601 | |
Net Assets consist of: | ||
Paid in capital | $ 626,504,454 | |
Undistributed net investment income | 652,485 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (17,903,095) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,004,757 | |
Net Assets, for 44,147,003 shares outstanding | $ 611,258,601 | |
Net Asset Value, offering price and redemption price per share ($611,258,601 ÷ 44,147,003 shares) | $ 13.85 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited) - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 7,622,561 | |
Interest | 15 | |
Income from Fidelity Central Funds | 128,635 | |
Total income | 7,751,211 | |
Expenses | ||
Management fee | $ 1,958,505 | |
Performance adjustment | 27,427 | |
Transfer agent fees | 946,787 | |
Accounting and security lending fees | 126,851 | |
Custodian fees and expenses | 21,240 | |
Independent trustees' compensation | 1,462 | |
Registration fees | 21,943 | |
Audit | 34,127 | |
Legal | 1,868 | |
Interest | 12,367 | |
Miscellaneous | 20,632 | |
Total expenses before reductions | 3,173,209 | |
Expense reductions | (11,548) | 3,161,661 |
Net investment income (loss) | 4,589,550 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (10,375,316) | |
Foreign currency transactions | 1,481 | |
Total net realized gain (loss) | (10,373,835) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (30,223,886) | |
Assets and liabilities in foreign currencies | 4,058 | |
Total change in net unrealized appreciation (depreciation) | (30,219,828) | |
Net gain (loss) | (40,593,663) | |
Net increase (decrease) in net assets resulting from operations | $ (36,004,113) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 4,589,550 | $ 5,883,894 |
Net realized gain (loss) | (10,373,835) | 35,772,706 |
Change in net unrealized appreciation (depreciation) | (30,219,828) | 5,245,913 |
Net increase (decrease) in net assets resulting | (36,004,113) | 46,902,513 |
Distributions to shareholders from net investment income | (7,478,439) | (2,803,432) |
Distributions to shareholders from net realized gain | (31,750,790) | (12,620,941) |
Total distributions | (39,229,229) | (15,424,373) |
Share transactions | 149,529,009 | 640,676,434 |
Reinvestment of distributions | 37,874,830 | 14,852,830 |
Cost of shares redeemed | (232,263,378) | (228,357,433) |
Net increase (decrease) in net assets resulting from share transactions | (44,859,539) | 427,171,831 |
Total increase (decrease) in net assets | (120,092,881) | 458,649,971 |
Net Assets | ||
Beginning of period | 731,351,482 | 272,701,511 |
End of period (including undistributed net investment income of $652,485 and undistributed net investment income of $4,072,223, respectively) | $ 611,258,601 | $ 731,351,482 |
Other Information Shares | ||
Sold | 9,992,188 | 41,940,771 |
Issued in reinvestment of distributions | 2,583,422 | 1,040,054 |
Redeemed | (15,743,991) | (15,217,485) |
Net increase (decrease) | (3,168,381) | 27,763,340 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Blue Chip Value Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the
Semiannual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), partnerships and losses deferred due to wash sales.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 64,399,563 |
Unrealized depreciation | (65,094,405) |
Net unrealized appreciation (depreciation) | $ (694,842) |
Cost for federal income tax purposes | $ 627,667,420 |
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $196,713,881 and $277,337,584, respectively.
Semiannual Report
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .56% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .27% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also as affiliate of FMR was the Fund's transfer agent.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $6,550 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest |
Borrower | $ 8,535,083 | 4.35% | $ 12,367 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $921 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $66,432.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $3,840 for the period. In addition, through arrangements with the Fund's transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's transfer agent expenses by $7,708.
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
Semiannual Report
10. Other - continued
enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $9,325.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
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Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
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Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Semiannual Report
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Ohio
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Pennsylvania
600 West DeKalb Pike
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Rhode Island
10 Memorial Boulevard
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3018 Peoples Street
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Texas
10000 Research Boulevard
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12532 Memorial Drive
Houston, TX
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Houston, TX
6560 Fannin Street
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6500 N. MacArthur Blvd.
Irving, TX
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14100 San Pedro
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Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
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Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
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Fidelity®
Dividend Growth
Fund
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a share-holder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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 indi-rectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 924.70 | $ 3.10 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,021.92 | $ 3.25 |
* Expenses are equal to the Fund's annualized expense ratio of .64%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Cardinal Health, Inc. | 6.8 | 7.0 |
Johnson & Johnson | 6.5 | 5.6 |
American International Group, Inc. | 5.8 | 6.0 |
Bank of America Corp. | 4.9 | 5.0 |
Time Warner, Inc. | 3.8 | 2.7 |
ConocoPhillips | 3.2 | 1.1 |
Wyeth | 3.1 | 3.7 |
Microsoft Corp. | 2.8 | 2.2 |
Citigroup, Inc. | 2.6 | 0.3 |
Hewlett-Packard Co. | 2.5 | 1.4 |
42.0 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Financials | 22.3 | 21.8 |
Information Technology | 19.5 | 19.0 |
Health Care | 18.3 | 18.6 |
Consumer Discretionary | 12.2 | 11.3 |
Energy | 8.4 | 6.3 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 96.7% | ![]() | Stocks 96.8% | ||||
![]() | Convertible | ![]() | Convertible | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 4.4% | ** Foreign investments | 3.4% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.7% | ||||
Shares | Value (000s) | |||
CONSUMER DISCRETIONARY - 12.1% | ||||
Automobiles - 0.2% | ||||
Ford Motor Co. (a) | 3,415,974 | $ 22,682 | ||
Media - 7.0% | ||||
Clear Channel Communications, Inc. | 3,118,735 | 95,776 | ||
Comcast Corp. Class A (special) (non-vtg.) (a) | 1,000,000 | 17,990 | ||
Omnicom Group, Inc. | 3,007,050 | 136,430 | ||
The Walt Disney Co. | 4,383,600 | 131,201 | ||
Time Warner Cable, Inc. (a) | 336,238 | 8,460 | ||
Time Warner, Inc. | 29,587,800 | 465,712 | ||
855,569 | ||||
Multiline Retail - 2.2% | ||||
Kohl's Corp. (a) | 1,979,600 | 90,349 | ||
Target Corp. | 3,095,564 | 172,051 | ||
262,400 | ||||
Specialty Retail - 2.7% | ||||
Gap, Inc. | 818,400 | 15,648 | ||
Home Depot, Inc. | 8,209,368 | 251,781 | ||
Staples, Inc. | 2,729,682 | 65,349 | ||
332,778 | ||||
TOTAL CONSUMER DISCRETIONARY | 1,473,429 | |||
CONSUMER STAPLES - 4.0% | ||||
Food & Staples Retailing - 3.0% | ||||
CVS Caremark Corp. | 6,015,900 | 235,041 | ||
Sysco Corp. | 1,000,000 | 29,050 | ||
Wal-Mart Stores, Inc. | 2,121,947 | 107,965 | ||
372,056 | ||||
Household Products - 0.9% | ||||
Kimberly-Clark Corp. | 696,700 | 45,738 | ||
Procter & Gamble Co. | 948,546 | 62,557 | ||
108,295 | ||||
Tobacco - 0.1% | ||||
Altria Group, Inc. | 138,800 | 10,524 | ||
TOTAL CONSUMER STAPLES | 490,875 | |||
ENERGY - 8.4% | ||||
Energy Equipment & Services - 2.6% | ||||
Diamond Offshore Drilling, Inc. | 552,500 | 62,394 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
ENERGY - continued | ||||
Energy Equipment & Services - continued | ||||
Nabors Industries Ltd. (a) | 3,992,082 | $ 108,664 | ||
Patterson-UTI Energy, Inc. | 597,212 | 11,693 | ||
Schlumberger Ltd. (NY Shares) | 150,000 | 11,319 | ||
Transocean, Inc. (a) | 970,907 | 119,033 | ||
313,103 | ||||
Oil, Gas & Consumable Fuels - 5.8% | ||||
Chesapeake Energy Corp. | 2,218,200 | 82,584 | ||
ConocoPhillips | 4,934,325 | 396,325 | ||
Copano Energy LLC | 200,000 | 7,068 | ||
EOG Resources, Inc. | 288,200 | 25,218 | ||
Quicksilver Resources, Inc. (a) | 476,900 | 27,102 | ||
Ultra Petroleum Corp. (a) | 834,300 | 57,400 | ||
Valero Energy Corp. | 1,477,945 | 87,480 | ||
XTO Energy, Inc. | 459,875 | 23,886 | ||
707,063 | ||||
TOTAL ENERGY | 1,020,166 | |||
FINANCIALS - 22.3% | ||||
Capital Markets - 2.5% | ||||
Bank of New York Mellon Corp. | 1,529,607 | 71,326 | ||
Franklin Resources, Inc. | 650,300 | 67,781 | ||
Goldman Sachs Group, Inc. | 332,600 | 66,776 | ||
KKR Private Equity Investors, LP | 605,700 | 10,145 | ||
KKR Private Equity Investors, LP Restricted Depositary Units (e) | 2,296,400 | 38,465 | ||
State Street Corp. | 641,200 | 52,655 | ||
307,148 | ||||
Commercial Banks - 2.4% | ||||
PNC Financial Services Group, Inc. | 4,503,207 | 295,500 | ||
Consumer Finance - 0.5% | ||||
American Express Co. | 1,280,400 | 63,149 | ||
Diversified Financial Services - 7.5% | ||||
Bank of America Corp. | 13,503,503 | 598,880 | ||
Citigroup, Inc. | 10,977,795 | 309,793 | ||
908,673 | ||||
Insurance - 9.3% | ||||
ACE Ltd. | 397,500 | 23,190 | ||
American International Group, Inc. | 12,767,600 | 704,261 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
FINANCIALS - continued | ||||
Insurance - continued | ||||
Hartford Financial Services Group, Inc. (d) | 3,528,220 | $ 284,974 | ||
MetLife, Inc. | 2,082,400 | 122,799 | ||
1,135,224 | ||||
Thrifts & Mortgage Finance - 0.1% | ||||
Fannie Mae | 254,433 | 8,615 | ||
TOTAL FINANCIALS | 2,718,309 | |||
HEALTH CARE - 18.3% | ||||
Health Care Equipment & Supplies - 0.5% | ||||
Boston Scientific Corp. (a) | 1,497,800 | 18,168 | ||
Medtronic, Inc. | 904,100 | 42,104 | ||
60,272 | ||||
Health Care Providers & Services - 6.8% | ||||
Cardinal Health, Inc. | 14,268,496 | 827,147 | ||
UnitedHealth Group, Inc. | 39,200 | 1,993 | ||
829,140 | ||||
Pharmaceuticals - 11.0% | ||||
Johnson & Johnson (d) | 12,458,632 | 788,133 | ||
Merck & Co., Inc. | 2,041,305 | 94,472 | ||
Schering-Plough Corp. | 4,112,130 | 80,474 | ||
Wyeth | 9,524,260 | 379,066 | ||
1,342,145 | ||||
TOTAL HEALTH CARE | 2,231,557 | |||
INDUSTRIALS - 7.8% | ||||
Aerospace & Defense - 2.5% | ||||
General Dynamics Corp. | 599,455 | 50,630 | ||
Honeywell International, Inc. | 2,853,200 | 168,539 | ||
Raytheon Co. | 1,273,900 | 82,982 | ||
302,151 | ||||
Air Freight & Logistics - 0.8% | ||||
FedEx Corp. | 250,300 | 23,398 | ||
United Parcel Service, Inc. Class B | 1,053,190 | 77,051 | ||
100,449 | ||||
Airlines - 0.4% | ||||
AMR Corp. (a) | 3,712,300 | 51,749 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
INDUSTRIALS - continued | ||||
Electrical Equipment - 0.5% | ||||
Cooper Industries Ltd. Class A | 1,385,133 | $ 61,694 | ||
Industrial Conglomerates - 2.2% | ||||
3M Co. | 229,800 | 18,304 | ||
General Electric Co. | 6,914,585 | 244,845 | ||
263,149 | ||||
Machinery - 1.2% | ||||
Illinois Tool Works, Inc. | 1,896,574 | 95,587 | ||
Ingersoll-Rand Co. Ltd. Class A | 1,240,100 | 49,009 | ||
144,596 | ||||
Road & Rail - 0.2% | ||||
Ryder System, Inc. | 400,000 | 20,824 | ||
TOTAL INDUSTRIALS | 944,612 | |||
INFORMATION TECHNOLOGY - 19.5% | ||||
Communications Equipment - 5.1% | ||||
Cisco Systems, Inc. (a) | 12,187,100 | 298,584 | ||
Motorola, Inc. | 23,915,420 | 275,745 | ||
QUALCOMM, Inc. | 1,012,200 | 42,938 | ||
617,267 | ||||
Computers & Peripherals - 3.6% | ||||
EMC Corp. (a) | 2,506,300 | 39,775 | ||
Hewlett-Packard Co. | 6,900,200 | 301,884 | ||
International Business Machines Corp. | 838,319 | 89,985 | ||
431,644 | ||||
Electronic Equipment & Instruments - 0.5% | ||||
Tyco Electronics Ltd. | 1,951,972 | 65,996 | ||
IT Services - 2.5% | ||||
Accenture Ltd. Class A | 5,566,060 | 192,697 | ||
The Western Union Co. | 4,869,194 | 109,070 | ||
301,767 | ||||
Semiconductors & Semiconductor Equipment - 3.5% | ||||
Analog Devices, Inc. | 1,429,400 | 40,538 | ||
Applied Materials, Inc. | 4,359,600 | 78,124 | ||
Intel Corp. | 7,401,400 | 156,910 | ||
Lam Research Corp. (a) | 1,028,593 | 39,488 | ||
Linear Technology Corp. (d) | 2,279,619 | 63,077 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
INFORMATION TECHNOLOGY - continued | ||||
Semiconductors & Semiconductor Equipment - continued | ||||
National Semiconductor Corp. | 1,372,777 | $ 25,300 | ||
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 2,558,969 | 23,747 | ||
427,184 | ||||
Software - 4.3% | ||||
Microsoft Corp. | 10,525,687 | 343,137 | ||
Oracle Corp. (a) | 8,942,400 | 183,766 | ||
526,903 | ||||
TOTAL INFORMATION TECHNOLOGY | 2,370,761 | |||
TELECOMMUNICATION SERVICES - 4.3% | ||||
Diversified Telecommunication Services - 4.1% | ||||
AT&T, Inc. | 6,032,246 | 232,181 | ||
Qwest Communications International, Inc. | 9,662,157 | 56,813 | ||
Verizon Communications, Inc. | 5,388,532 | 209,291 | ||
498,285 | ||||
Wireless Telecommunication Services - 0.2% | ||||
Sprint Nextel Corp. | 2,337,686 | 24,616 | ||
TOTAL TELECOMMUNICATION SERVICES | 522,901 | |||
TOTAL COMMON STOCKS (Cost $10,877,979) | 11,772,610 | |||
Convertible Bonds - 0.5% | ||||
Principal Amount (000s) | ||||
CONSUMER DISCRETIONARY - 0.1% | ||||
Automobiles - 0.1% | ||||
Ford Motor Co. 4.25% 12/15/36 | $ 12,030 | 11,907 | ||
TELECOMMUNICATION SERVICES - 0.4% | ||||
Diversified Telecommunication Services - 0.4% | ||||
Qwest Communications International, Inc. 3.5% 11/15/25 | 36,750 | 44,346 | ||
TOTAL CONVERTIBLE BONDS (Cost $48,780) | 56,253 | |||
Money Market Funds - 3.2% | ||||
Shares | Value (000s) | |||
Fidelity Cash Central Fund, 3.79% (b) | 335,819,306 | $ 335,819 | ||
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 59,707,000 | 59,707 | ||
TOTAL MONEY MARKET FUNDS (Cost $395,526) | 395,526 | |||
TOTAL INVESTMENT PORTFOLIO - 100.4% (Cost $11,322,285) | 12,224,389 | |||
NET OTHER ASSETS - (0.4)% | (44,767) | |||
NET ASSETS - 100% | $ 12,179,622 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $38,465,000 or 0.3% of net assets. |
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 | $ 9,704 |
Fidelity Securities Lending Cash Central Fund | 117 |
Total | $ 9,821 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $59,354) - See accompanying schedule: Unaffiliated issuers (cost $10,926,759) | $ 11,828,863 | |
Fidelity Central Funds (cost $395,526) | 395,526 | |
Total Investments (cost $11,322,285) | $ 12,224,389 | |
Receivable for investments sold | 114,801 | |
Receivable for fund shares sold | 9,205 | |
Dividends receivable | 11,976 | |
Interest receivable | 332 | |
Distributions receivable from Fidelity Central Funds | 1,325 | |
Prepaid expenses | 47 | |
Other receivables | 238 | |
Total assets | 12,362,313 | |
Liabilities | ||
Payable for investments purchased | $ 97,988 | |
Payable for fund shares redeemed | 17,616 | |
Accrued management fee | 3,889 | |
Other affiliated payables | 2,814 | |
Other payables and accrued expenses | 677 | |
Collateral on securities loaned, at value | 59,707 | |
Total liabilities | 182,691 | |
Net Assets | $ 12,179,622 | |
Net Assets consist of: | ||
Paid in capital | $ 10,854,431 | |
Undistributed net investment income | 18,039 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 405,043 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 902,109 | |
Net Assets, for 438,415 shares outstanding | $ 12,179,622 | |
Net Asset Value, offering price and redemption price per share ($12,179,622 ÷ 438,415 shares) | $ 27.78 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended January 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends | $ 151,460 | |
Interest | 1,003 | |
Income from Fidelity Central Funds | 9,821 | |
Total income | 162,284 | |
Expenses | ||
Management fee | $ 42,608 | |
Performance adjustment | (11,588) | |
Transfer agent fees | 16,861 | |
Accounting and security lending fees | 761 | |
Custodian fees and expenses | 116 | |
Independent trustees' compensation | 33 | |
Registration fees | 40 | |
Audit | 57 | |
Legal | 48 | |
Miscellaneous | 467 | |
Total expenses before reductions | 49,403 | |
Expense reductions | (376) | 49,027 |
Net investment income (loss) | 113,257 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 729,567 | |
Futures contracts | (21,604) | |
Total net realized gain (loss) | 707,963 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (1,891,672) | |
Assets and liabilities in foreign currencies | 5 | |
Total change in net unrealized appreciation (depreciation) | (1,891,667) | |
Net gain (loss) | (1,183,704) | |
Net increase (decrease) in net assets resulting from operations | $ (1,070,447) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2008 | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 113,257 | $ 271,266 |
Net realized gain (loss) | 707,963 | 1,153,624 |
Change in net unrealized appreciation (depreciation) | (1,891,667) | 986,456 |
Net increase (decrease) in net assets resulting | (1,070,447) | 2,411,346 |
Distributions to shareholders from net investment income | (220,835) | (237,313) |
Distributions to shareholders from net realized gain | (1,096,480) | (431,005) |
Total distributions | (1,317,315) | (668,318) |
Share transactions | 910,417 | 2,819,194 |
Reinvestment of distributions | 1,277,082 | 650,322 |
Cost of shares redeemed | (3,884,777) | (4,470,484) |
Net increase (decrease) in net assets resulting from share transactions | (1,697,278) | (1,000,968) |
Total increase (decrease) in net assets | (4,085,040) | 742,060 |
Net Assets | ||
Beginning of period | 16,264,662 | 15,522,602 |
End of period (including undistributed net investment income of $18,039 and undistributed net investment income of $139,799, respectively) | $ 12,179,622 | $ 16,264,662 |
Other Information Shares | ||
Sold | 29,515 | 88,615 |
Issued in reinvestment of distributions | 41,883 | 21,336 |
Redeemed | (129,898) | (139,296) |
Net increase (decrease) | (58,500) | (29,345) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Dividend Growth Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, partnerships, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 1,755,498 |
Unrealized depreciation | (883,414) |
Net unrealized appreciation (depreciation) | $ 872,084 |
Cost for federal income tax purposes | $ 11,352,305 |
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Operating Policies - continued
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,427,178 and $6,287,279, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 an appropriate benchmark index. For the period, the total annualized
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
management fee rate, including the performance adjustment, was .40% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .22% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the Fund's transfer agent.
Accounting and Security Lending Fees. FIIOC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FIIOC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $58 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $22 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
8. Security Lending - continued
the collateral. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $117.
9. Expense Reductions.
In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $5 and $371, respectively.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $1,580.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
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Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
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Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
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Investment Adviser
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Boston, MA
Investment Sub Advisers
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Fidelity®
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Semiannual Report
January 31, 2008
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Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 934.20 | $ 3.26 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,021.77 | $ 3.40 |
* Expenses are equal to the Fund's annualized expense ratio of .67%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
American International Group, Inc. | 6.4 | 6.2 |
General Electric Co. | 5.5 | 6.1 |
Bank of America Corp. | 5.4 | 5.2 |
Wachovia Corp. | 4.4 | 3.7 |
Procter & Gamble Co. | 3.0 | 3.6 |
JPMorgan Chase & Co. | 3.0 | 2.6 |
Google, Inc. Class A (sub. vtg.) | 2.3 | 3.1 |
Staples, Inc. | 2.2 | 1.6 |
Home Depot, Inc. | 2.0 | 3.3 |
Hewlett-Packard Co. | 1.8 | 0.0 |
36.0 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Financials | 33.3 | 30.2 |
Industrials | 12.3 | 11.2 |
Information Technology | 12.3 | 11.4 |
Energy | 12.2 | 12.3 |
Health Care | 12.0 | 11.8 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 * * | ||||||
![]() | Stocks 99.4% | ![]() | Stocks 99.2% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 18.8% | * * Foreign investments | 20.3% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.4% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 11.6% | |||
Diversified Consumer Services - 0.6% | |||
Apollo Group, Inc. Class A (non-vtg.) (a) | 1,350,000 | $ 107,649 | |
Hotels, Restaurants & Leisure - 0.7% | |||
Starbucks Corp. (a)(d) | 6,500,000 | 122,915 | |
Household Durables - 2.9% | |||
Centex Corp. | 2,000,000 | 55,560 | |
D.R. Horton, Inc. | 6,500,000 | 112,125 | |
KB Home (d) | 3,800,000 | 104,500 | |
Ryland Group, Inc. (d)(e) | 2,900,000 | 97,759 | |
Standard Pacific Corp. (d)(e) | 4,000,000 | 15,240 | |
Toll Brothers, Inc. (a)(d) | 4,500,000 | 104,760 | |
489,944 | |||
Media - 2.4% | |||
Cablevision Systems Corp. - NY Group Class A (a) | 1,500,000 | 35,220 | |
Comcast Corp. Class A (a) | 11,800,000 | 214,288 | |
Focus Media Holding Ltd. ADR (a)(d) | 1,600,000 | 76,880 | |
Grupo Televisa SA de CV (CPO) sponsored ADR | 3,900,000 | 86,931 | |
413,319 | |||
Multiline Retail - 0.8% | |||
Kohl's Corp. (a) | 3,000,000 | 136,920 | |
Specialty Retail - 4.2% | |||
Home Depot, Inc. | 11,000,000 | 337,370 | |
Staples, Inc. | 16,000,000 | 383,040 | |
720,410 | |||
TOTAL CONSUMER DISCRETIONARY | 1,991,157 | ||
CONSUMER STAPLES - 5.2% | |||
Food & Staples Retailing - 1.6% | |||
CVS Caremark Corp. | 5,300,000 | 207,071 | |
X5 Retail Group NV GDR (a)(f) | 2,000,000 | 64,200 | |
271,271 | |||
Food Products - 0.6% | |||
Nestle SA (Reg.) | 225,000 | 101,205 | |
Household Products - 3.0% | |||
Procter & Gamble Co. | 7,900,000 | 521,005 | |
TOTAL CONSUMER STAPLES | 893,481 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
ENERGY - 12.2% | |||
Energy Equipment & Services - 2.1% | |||
National Oilwell Varco, Inc. (a) | 1,000,000 | $ 60,230 | |
Schlumberger Ltd. (NY Shares) | 2,600,000 | 196,196 | |
Smith International, Inc. | 800,000 | 43,368 | |
Weatherford International Ltd. (a) | 900,000 | 55,629 | |
355,423 | |||
Oil, Gas & Consumable Fuels - 10.1% | |||
Canadian Natural Resources Ltd. | 3,300,000 | 211,143 | |
Chesapeake Energy Corp. | 6,500,000 | 241,995 | |
EOG Resources, Inc. | 3,200,000 | 280,000 | |
Occidental Petroleum Corp. | 3,200,000 | 217,184 | |
Petroplus Holdings AG (a) | 1,300,000 | 80,046 | |
Plains Exploration & Production Co. (a) | 2,700,000 | 131,328 | |
Ultra Petroleum Corp. (a) | 1,860,992 | 128,036 | |
Valero Energy Corp. | 5,000,000 | 295,950 | |
XTO Energy, Inc. | 3,000,000 | 155,820 | |
1,741,502 | |||
TOTAL ENERGY | 2,096,925 | ||
FINANCIALS - 33.3% | |||
Capital Markets - 5.8% | |||
AP Alternative Assets, L.P. Restricted Depositary Units (a)(f) | 4,454,200 | 64,586 | |
KKR Private Equity Investors, LP | 3,874,500 | 64,898 | |
KKR Private Equity Investors, LP Restricted Depositary Units (f) | 6,842,100 | 114,605 | |
Lehman Brothers Holdings, Inc. | 4,800,000 | 308,016 | |
Morgan Stanley | 3,500,000 | 173,005 | |
State Street Corp. | 2,100,000 | 172,452 | |
UBS AG (NY Shares) | 2,500,000 | 103,225 | |
1,000,787 | |||
Commercial Banks - 5.0% | |||
Erste Bank AG | 1,750,000 | 95,185 | |
Wachovia Corp. | 19,600,000 | 763,028 | |
858,213 | |||
Consumer Finance - 1.5% | |||
American Express Co. | 3,200,000 | 157,824 | |
Capital One Financial Corp. | 1,900,000 | 104,139 | |
261,963 | |||
Diversified Financial Services - 9.1% | |||
African Bank Investments Ltd. | 15,000,000 | 56,534 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
FINANCIALS - continued | |||
Diversified Financial Services - continued | |||
Bank of America Corp. (d) | 21,000,000 | $ 931,350 | |
JPMorgan Chase & Co. | 10,700,000 | 508,785 | |
Moody's Corp. (d) | 1,700,000 | 59,483 | |
1,556,152 | |||
Insurance - 10.7% | |||
ACE Ltd. | 1,900,000 | 110,846 | |
AMBAC Financial Group, Inc. (d)(e) | 5,950,000 | 69,734 | |
American International Group, Inc. | 19,900,000 | 1,097,683 | |
Assured Guaranty Ltd. | 2,800,000 | 66,248 | |
Hartford Financial Services Group, Inc. | 1,900,000 | 153,463 | |
RenaissanceRe Holdings Ltd. | 2,750,000 | 156,723 | |
W.R. Berkley Corp. | 3,469,943 | 105,000 | |
XL Capital Ltd. Class A | 1,800,000 | 81,000 | |
1,840,697 | |||
Real Estate Management & Development - 0.4% | |||
CB Richard Ellis Group, Inc. Class A (a) | 3,800,000 | 73,758 | |
Thrifts & Mortgage Finance - 0.8% | |||
Fannie Mae | 1,067,600 | 36,149 | |
MGIC Investment Corp. (d)(e) | 4,100,000 | 75,850 | |
Radian Group, Inc. (d) | 2,500,000 | 22,850 | |
134,849 | |||
TOTAL FINANCIALS | 5,726,419 | ||
HEALTH CARE - 12.0% | |||
Biotechnology - 3.8% | |||
Amgen, Inc. (a) | 4,100,000 | 191,019 | |
Celgene Corp. (a) | 1,600,000 | 89,776 | |
Cephalon, Inc. (a)(d) | 1,500,000 | 98,445 | |
Genentech, Inc. (a) | 1,800,000 | 126,342 | |
MannKind Corp. (a)(d) | 3,500,000 | 27,650 | |
Myriad Genetics, Inc. (a)(d) | 1,200,000 | 51,612 | |
Vertex Pharmaceuticals, Inc. (a) | 3,400,000 | 69,224 | |
654,068 | |||
Health Care Equipment & Supplies - 1.0% | |||
Becton, Dickinson & Co. | 1,100,000 | 95,183 | |
C.R. Bard, Inc. | 900,000 | 86,913 | |
182,096 | |||
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - 1.7% | |||
Cardinal Health, Inc. | 2,500,000 | $ 144,925 | |
UnitedHealth Group, Inc. | 2,900,000 | 147,436 | |
292,361 | |||
Life Sciences Tools & Services - 0.7% | |||
Illumina, Inc. (a)(d) | 1,900,000 | 121,030 | |
Pharmaceuticals - 4.8% | |||
Allergan, Inc. | 2,500,000 | 167,975 | |
Elan Corp. PLC sponsored ADR (a) | 6,800,000 | 172,788 | |
Johnson & Johnson | 4,100,000 | 259,366 | |
Roche Holding AG (participation certificate) | 700,000 | 128,044 | |
Sirtris Pharmaceuticals, Inc. (d)(e) | 1,700,000 | 20,502 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR (d) | 1,600,000 | 73,664 | |
822,339 | |||
TOTAL HEALTH CARE | 2,071,894 | ||
INDUSTRIALS - 12.3% | |||
Aerospace & Defense - 1.5% | |||
Honeywell International, Inc. | 4,550,000 | 268,769 | |
Airlines - 0.5% | |||
UAL Corp. | 2,200,000 | 83,490 | |
Commercial Services & Supplies - 1.4% | |||
Robert Half International, Inc. (d)(e) | 8,500,000 | 236,130 | |
Electrical Equipment - 1.9% | |||
Evergreen Solar, Inc. (a)(e) | 5,200,000 | 63,388 | |
Q-Cells AG (a) | 650,000 | 61,164 | |
Renewable Energy Corp. AS (a) | 1,400,000 | 36,600 | |
SolarWorld AG | 1,300,000 | 57,646 | |
Sunpower Corp. Class A (a)(d) | 800,000 | 55,272 | |
Suntech Power Holdings Co. Ltd. sponsored ADR (a)(d) | 950,000 | 51,994 | |
326,064 | |||
Industrial Conglomerates - 5.5% | |||
General Electric Co. | 26,600,000 | 941,906 | |
Machinery - 1.1% | |||
Illinois Tool Works, Inc. | 3,800,000 | 191,520 | |
Road & Rail - 0.4% | |||
Ryder System, Inc. | 1,400,000 | 72,884 | |
TOTAL INDUSTRIALS | 2,120,763 | ||
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - 12.3% | |||
Communications Equipment - 1.0% | |||
Corning, Inc. | 7,000,000 | $ 168,490 | |
Computers & Peripherals - 1.8% | |||
Hewlett-Packard Co. | 7,200,000 | 315,000 | |
Electronic Equipment & Instruments - 0.9% | |||
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 18,000,000 | 96,620 | |
Motech Industries, Inc. | 8,600,000 | 51,344 | |
147,964 | |||
Internet Software & Services - 2.7% | |||
Google, Inc. Class A (sub. vtg.) (a) | 700,000 | 395,010 | |
ValueClick, Inc. (a) | 3,500,000 | 76,405 | |
471,415 | |||
IT Services - 2.0% | |||
Cognizant Technology Solutions Corp. Class A (a) | 6,100,000 | 170,190 | |
Infosys Technologies Ltd. sponsored ADR | 2,500,000 | 103,500 | |
Satyam Computer Services Ltd. sponsored ADR | 2,700,000 | 65,745 | |
339,435 | |||
Semiconductors & Semiconductor Equipment - 3.9% | |||
Applied Materials, Inc. | 9,000,000 | 161,280 | |
ARM Holdings PLC | 61,000,000 | 142,758 | |
LDK Solar Co. Ltd. Sponsored ADR (d) | 1,300,000 | 45,825 | |
Marvell Technology Group Ltd. (a) | 4,000,000 | 47,480 | |
Maxim Integrated Products, Inc. | 2,700,000 | 53,082 | |
MediaTek, Inc. | 3,500,000 | 34,866 | |
Renesola Ltd. (a)(d) | 3,152,500 | 20,122 | |
Taiwan Semiconductor Manufacturing Co. Ltd. | 89,999,942 | 168,620 | |
674,033 | |||
TOTAL INFORMATION TECHNOLOGY | 2,116,337 | ||
MATERIALS - 0.5% | |||
Metals & Mining - 0.5% | |||
ArcelorMittal SA (NY Reg.) Class A | 1,250,000 | 82,988 | |
TOTAL COMMON STOCKS (Cost $16,614,123) | 17,099,964 | ||
Money Market Funds - 2.4% | |||
Shares | Value (000s) | ||
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 406,886,236 | $ 406,886 | |
TOTAL INVESTMENT PORTFOLIO - 101.8% (Cost $17,021,009) | 17,506,850 | ||
NET OTHER ASSETS - (1.8)% | (314,489) | ||
NET ASSETS - 100% | $ 17,192,361 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
(f) 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 $243,391,000 or 1.4% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,344 |
Fidelity Securities Lending Cash Central Fund | 2,972 |
Total | $ 4,316 |
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: |
Affiliates | Value, | Purchases | Sales | Dividend | Value, |
AMBAC Financial Group, Inc. | $ - | $ 290,437 | $ - | $ 1,344 | $ 69,734 |
Evergreen Solar, Inc. | 31,654 | 22,605 | - | - | 63,388 |
Illumina, Inc. | 132,153 | - | 61,468 | - | - |
MGIC Investment Corp. | 180,856 | 392 | 10,404 | 1,289 | 75,850 |
RenaissanceRe Holdings Ltd. | 208,806 | - | 53,533 | 1,503 | - |
Robert Half International, Inc. | 305,910 | 8,323 | 25,450 | 1,730 | 236,130 |
Ryland Group, Inc. | 106,400 | 13,164 | 22,962 | 888 | 97,759 |
Sirtris Pharmaceuticals, Inc. | 4,238 | 20,791 | - | - | 20,502 |
Standard Pacific Corp. | 59,240 | - | - | 160 | 15,240 |
Total | $ 1,029,257 | $ 355,712 | $ 173,817 | $ 6,914 | $ 578,603 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 81.2% |
Switzerland | 2.5% |
United Kingdom | 2.2% |
Taiwan | 2.1% |
Canada | 1.9% |
Bermuda | 1.6% |
Cayman Islands | 1.2% |
Netherlands Antilles | 1.1% |
Ireland | 1.0% |
India | 1.0% |
Others (individually less than 1%) | 4.2% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) (Unaudited) | January 31, 2008 | |
Assets | ||
Investment in securities, at value (including securities loaned of $415,228) - See accompanying schedule: Unaffiliated issuers (cost $15,495,901) | $ 16,521,361 | |
Fidelity Central Funds (cost $406,886) | 406,886 | |
Other affiliated issuers (cost $1,118,222) | 578,603 | |
Total Investments (cost $17,021,009) | $ 17,506,850 | |
Cash | 1,273 | |
Receivable for investments sold | 232,891 | |
Receivable for fund shares sold | 8,898 | |
Dividends receivable | 3,286 | |
Distributions receivable from Fidelity Central Funds | 993 | |
Prepaid expenses | 64 | |
Other receivables | 954 | |
Total assets | 17,755,209 | |
Liabilities | ||
Payable for investments purchased | $ 95,714 | |
Payable for fund shares redeemed | 33,785 | |
Accrued management fee | 6,535 | |
Notes payable to affiliates | 15,202 | |
Other affiliated payables | 3,312 | |
Other payables and accrued expenses | 1,414 | |
Collateral on securities loaned, at value | 406,886 | |
Total liabilities | 562,848 | |
Net Assets | $ 17,192,361 | |
Net Assets consist of: | ||
Paid in capital | $ 16,667,579 | |
Undistributed net investment income | 5,401 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 33,530 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 485,851 | |
Net Assets, for 660,306 shares outstanding | $ 17,192,361 | |
Net Asset Value, offering price and redemption price per share ($17,192,361 ÷ 660,306 shares) | $ 26.04 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands (Unaudited) | Six months ended January 31, 2008 | |
Investment Income | ||
Dividends (including $6,914 earned from other affiliated issuers) | $ 183,819 | |
Interest | 81 | |
Income from Fidelity Central Funds | 4,316 | |
Total income | 188,216 | |
Expenses | ||
Management fee | $ 46,905 | |
Transfer agent fees | 19,511 | |
Accounting and security lending fees | 917 | |
Custodian fees and expenses | 498 | |
Independent trustees' compensation | 45 | |
Depreciation in deferred trustee compensation account | (1) | |
Registration fees | 42 | |
Audit | 83 | |
Legal | 300 | |
Interest | 394 | |
Miscellaneous | 636 | |
Total expenses before reductions | 69,330 | |
Expense reductions | (823) | 68,507 |
Net investment income (loss) | 119,709 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 827,561 | |
Other affiliated issuers | 8,491 | |
Foreign currency transactions | (149) | |
Total net realized gain (loss) | 835,903 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (2,192,132) | |
Assets and liabilities in foreign currencies | 9 | |
Total change in net unrealized appreciation (depreciation) | (2,192,123) | |
Net gain (loss) | (1,356,220) | |
Net increase (decrease) in net assets resulting from operations | $ (1,236,511) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 119,709 | $ 245,493 |
Net realized gain (loss) | 835,903 | 4,016,569 |
Change in net unrealized appreciation (depreciation) | (2,192,123) | (36,094) |
Net increase (decrease) in net assets resulting | (1,236,511) | 4,225,968 |
Distributions to shareholders from net investment income | (112,480) | (249,549) |
Distributions to shareholders from net realized gain | (2,632,846) | (5,102,919) |
Total distributions | (2,745,326) | (5,352,468) |
Share transactions | 707,185 | 3,378,425 |
Reinvestment of distributions | 2,679,261 | 5,231,624 |
Cost of shares redeemed | (4,905,467) | (13,651,081) |
Net increase (decrease) in net assets resulting from share transactions | (1,519,021) | (5,041,032) |
Total increase (decrease) in net assets | (5,500,858) | (6,167,532) |
Net Assets | ||
Beginning of period | 22,693,219 | 28,860,751 |
End of period (including undistributed net investment income of $5,401 and distributions in excess of net investment income of $1,828, respectively) | $ 17,192,361 | $ 22,693,219 |
Other Information Shares | ||
Sold | 24,160 | 104,430 |
Issued in reinvestment of distributions | 94,828 | 180,580 |
Redeemed | (169,706) | (418,890) |
Net increase (decrease) | (50,718) | (133,880) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 31.92 | $ 34.16 | $ 38.42 | $ 35.46 | $ 32.84 | $ 31.61 |
Income from Investment Operations | ||||||
Net investment income (loss) D | .17 | .27 | .34 | .60 G | .40 | .40 |
Net realized and unrealized gain (loss) | (2.08) | 3.84 | .18 | 3.31 | 2.63 | 1.20 |
Total from investment operations | (1.91) | 4.11 | .52 | 3.91 | 3.03 | 1.60 |
Distributions from net investment income | (.16) | (.27) | (.38) | (.61) | (.41) | (.37) |
Distributions from net realized gain | (3.81) | (6.08) | (4.40) | (.34) | - | - |
Total distributions | (3.97) | (6.35) | (4.78) | (.95) | (.41) | (.37) |
Net asset value, end of period | $ 26.04 | $ 31.92 | $ 34.16 | $ 38.42 | $ 35.46 | $ 32.84 |
Total Return B, C | (6.58)% | 14.28% | 1.22% | 11.15% | 9.24% | 5.15% |
Ratios to Average Net Assets E, H | ||||||
Expenses before reductions | .67% A | .68% | .69% | .69% | .70% | .73% |
Expenses net of fee waivers, if any | .67% A | .68% | .69% | .69% | .70% | .73% |
Expenses net of all reductions | .66% A | .67% | .65% | .68% | .69% | .71% |
Net investment income (loss) | 1.16% A | .84% | .94% | 1.63% G | 1.13% | 1.29% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 17,192 | $ 22,693 | $ 28,861 | $ 31,789 | $ 29,776 | $ 28,263 |
Portfolio turnover rate F | 47% A | 52% | 120% | 31% | 30% | 33% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.13 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.27%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Growth & Income Portfolio (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions.Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, redemptions in kind, partnerships, deferred trustees compensation, and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,515,937 | |
Unrealized depreciation | (2,049,939) | |
Net unrealized appreciation (depreciation) | $ 465,998 | |
Cost for federal income tax purposes | $ 17,040,852 |
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Operating Policies - continued
Restricted Securities - continued
at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $4,797,735 and $8,851,584, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .46% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .19% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR, was the Fund's transer agent.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $33 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. Any open loans, including accrued interest, at period end
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Interfund Lending Program - continued
are presented under the caption "Notes payable to affiliates" in the Fund's Statement of Assets and Liabilities. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily | Weighted Average | Interest |
Borrower | $ 30,174 | 4.65% | $ 328 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $32 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $2,972.
9. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. 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 daily loan balance during the period for which loans were
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
9. Bank Borrowings - continued
outstanding amounted to $44,634. The weighted average interest rate was 4.84%. The interest expense amounted to $66 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
10. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $247 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $5 and $571, respectively.
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $1,813.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
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Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
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Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Semiannual Report
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Semiannual Report
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Semiannual Report
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Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
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Semiannual Report
January 31, 2008
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Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
Semiannual Report
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Shareholder Expense Example - continued
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 918.30 | $ 6.65 |
Hypothetical A | $ 1,000.00 | $ 1,018.20 | $ 7.00 |
Class T | |||
Actual | $ 1,000.00 | $ 916.90 | $ 7.90 |
Hypothetical A | $ 1,000.00 | $ 1,016.89 | $ 8.31 |
Class B | |||
Actual | $ 1,000.00 | $ 914.70 | $ 10.30 |
Hypothetical A | $ 1,000.00 | $ 1,014.38 | $ 10.84 |
Class C | |||
Actual | $ 1,000.00 | $ 915.10 | $ 10.30 |
Hypothetical A | $ 1,000.00 | $ 1,014.38 | $ 10.84 |
International Real Estate | |||
Actual | $ 1,000.00 | $ 919.60 | $ 5.21 |
Hypothetical A | $ 1,000.00 | $ 1,019.71 | $ 5.48 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 919.80 | $ 5.45 |
Hypothetical A | $ 1,000.00 | $ 1,019.46 | $ 5.74 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.38% |
Class T | 1.64% |
Class B | 2.14% |
Class C | 2.14% |
International Real Estate | 1.08% |
Institutional Class | 1.13% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Sun Hung Kai Properties Ltd. | 7.7 | 2.3 |
Westfield Group unit | 7.4 | 4.0 |
British Land Co. PLC | 5.7 | 5.8 |
Unibail-Rodamco | 5.2 | 3.6 |
Mitsubishi Estate Co. Ltd. | 5.1 | 6.9 |
Land Securities Group PLC | 4.5 | 3.5 |
Mitsui Fudosan Co. Ltd. | 2.9 | 2.9 |
Babis Vovos International Technical SA | 2.8 | 2.1 |
Hammerson PLC | 2.7 | 0.0 |
CapitaLand Ltd. | 2.3 | 3.5 |
46.3 | ||
Top Five Countries as of January 31, 2008 | ||
(excluding cash equivalents) | % of fund's | % of fund's net assets |
Hong Kong | 20.6 | 17.6 |
United Kingdom | 17.5 | 15.2 |
Australia | 17.3 | 21.0 |
Japan | 15.3 | 17.3 |
France | 6.3 | 4.8 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top Five REIT Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
REITs - Management/Investment | 29.4 | 34.6 |
REITs - Office Buildings | 9.2 | 1.4 |
REITs - Shopping Centers | 4.3 | 2.2 |
REITs - Industrial Buildings | 2.5 | 0.7 |
REITs - Apartments | 1.5 | 1.5 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks and Investment Companies 96.7% | ![]() | Stocks and Investment Companies 98.5% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 96.7% | ** Foreign investments | 98.5% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% | |||
Shares | Value | ||
Australia - 17.3% | |||
Aspen Group unit | 2,618,506 | $ 4,320,105 | |
Centro Retail Group unit | 3,850,000 | 1,605,228 | |
CFS Retail Property Trust | 6,906,178 | 13,066,016 | |
Charter Hall Group unit | 4,886,485 | 6,944,625 | |
DB RREEF Trust unit | 9,165,011 | 13,025,224 | |
Goodman Group unit | 3,591,779 | 14,106,091 | |
Stockland Corp. Ltd. unit | 1,704,290 | 11,094,381 | |
The GPT Group unit | 3,331,129 | 11,200,713 | |
Westfield Group unit | 3,406,771 | 56,511,602 | |
TOTAL AUSTRALIA | 131,873,985 | ||
Bermuda - 0.5% | |||
HKC Holdings Ltd. | 19,259,000 | 4,025,953 | |
HKC Holdings Ltd. warrants 11/30/09 (a) | 1,510,900 | 58,131 | |
TOTAL BERMUDA | 4,084,084 | ||
Brazil - 0.9% | |||
Iguatemi Empresa de Shopping Centers SA | 325,000 | 4,766,913 | |
MRV Engenharia e Participacoes SA | 94,500 | 1,767,510 | |
TOTAL BRAZIL | 6,534,423 | ||
Cayman Islands - 0.9% | |||
New World China Land Ltd. (d) | 12,356,200 | 7,019,983 | |
China - 0.6% | |||
China Resources Land Ltd. | 2,644,000 | 4,597,995 | |
Cyprus - 0.5% | |||
Mirland Development Corp. PLC | 390,000 | 3,865,868 | |
Finland - 1.7% | |||
Citycon Oyj | 2,281,403 | 12,645,800 | |
France - 6.3% | |||
Fonciere Des Regions | 62,900 | 8,345,321 | |
Unibail-Rodamco | 168,717 | 40,043,328 | |
TOTAL FRANCE | 48,388,649 | ||
Germany - 1.7% | |||
DIC Asset AG | 191,960 | 5,672,168 | |
IVG Immobilien AG | 89,500 | 3,046,986 | |
Patrizia Immobilien AG (d) | 680,100 | 4,462,886 | |
TOTAL GERMANY | 13,182,040 | ||
Greece - 2.8% | |||
Babis Vovos International Technical SA (a) | 744,830 | 21,100,493 | |
Common Stocks - continued | |||
Shares | Value | ||
Hong Kong - 20.6% | |||
Cheung Kong Holdings Ltd. | 254,000 | $ 4,094,646 | |
China Overseas Land & Investment Ltd. | 7,986,000 | 13,478,222 | |
Hang Lung Properties Ltd. | 3,414,000 | 13,288,306 | |
Hong Kong Land Holdings Ltd. | 3,712,000 | 17,446,400 | |
Hysan Development Co. Ltd. | 3,673,032 | 10,763,619 | |
Kerry Properties Ltd. | 1,811,411 | 11,998,715 | |
Link (REIT) | 4,406,914 | 11,088,709 | |
Sino Land Co. | 5,552,000 | 16,732,650 | |
Sun Hung Kai Properties Ltd. | 3,001,000 | 58,692,583 | |
TOTAL HONG KONG | 157,583,850 | ||
Italy - 0.6% | |||
Immobiliare Grande Distribuzione SpA | 1,609,700 | 4,848,929 | |
Japan - 15.3% | |||
DA Office Investment Corp. | 466 | 2,480,542 | |
Kenedix Realty Investment Corp. | 911 | 5,868,852 | |
Mitsubishi Estate Co. Ltd. | 1,463,000 | 38,800,529 | |
Mitsui Fudosan Co. Ltd. | 984,000 | 22,487,728 | |
New City Residence Investment Corp. | 1,187 | 4,554,651 | |
Nippon Building Fund, Inc. | 1,037 | 11,995,768 | |
Nippon Residential Investment Corp. | 1,689 | 7,005,069 | |
NTT Urban Development Co. | 2,800 | 4,423,963 | |
Sankei Building Co. Ltd. (d) | 105,000 | 1,016,129 | |
Sumitomo Realty & Development Co. Ltd. | 602,000 | 14,805,136 | |
Tokyo Tatemono Co. Ltd. | 406,000 | 3,417,380 | |
TOTAL JAPAN | 116,855,747 | ||
Netherlands - 1.3% | |||
Eurocommercial Properties NV (Certificaten Van Aandelen) unit | 156,332 | 8,310,554 | |
VastNed Retail NV | 15,000 | 1,475,493 | |
TOTAL NETHERLANDS | 9,786,047 | ||
Norway - 0.5% | |||
Norwegian Property ASA | 407,000 | 4,121,397 | |
Philippines - 1.8% | |||
Ayala Land, Inc. | 24,856,760 | 8,613,729 | |
Filinvest Land, Inc. | 185,414,000 | 5,231,979 | |
TOTAL PHILIPPINES | 13,845,708 | ||
Common Stocks - continued | |||
Shares | Value | ||
Russia - 1.1% | |||
PIK Group: | |||
GDR | 263,600 | $ 7,512,600 | |
GDR (Reg. S) unit | 20,000 | 570,000 | |
TOTAL RUSSIA | 8,082,600 | ||
Singapore - 3.5% | |||
Ascendas Real Estate Investment Trust (A-REIT) | 2,887,000 | 4,421,164 | |
CapitaLand Ltd. | 4,322,900 | 17,999,372 | |
City Developments Ltd. | 586,000 | 4,673,112 | |
TOTAL SINGAPORE | 27,093,648 | ||
South Africa - 0.5% | |||
Resilient Property Income Fund Ltd. unit | 1,201,650 | 4,021,848 | |
United Kingdom - 17.5% | |||
British Land Co. PLC | 2,153,400 | 43,590,316 | |
Brixton PLC | 898,000 | 6,292,819 | |
Capital & Regional PLC | 577,000 | 5,375,438 | |
Derwent London PLC | 437,000 | 11,961,302 | |
Hammerson PLC | 893,500 | 20,302,766 | |
Land Securities Group PLC | 1,076,700 | 34,332,123 | |
Songbird Estates PLC Class B | 978,200 | 3,131,648 | |
Unite Group PLC | 1,324,000 | 8,793,444 | |
TOTAL UNITED KINGDOM | 133,779,856 | ||
TOTAL COMMON STOCKS (Cost $755,757,092) | 733,312,950 | ||
Investment Companies - 0.8% | |||
Luxembourg - 0.8% | |||
ProLogis European Properties Fund | 412,000 | 6,224,254 | |
Money Market Funds - 2.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 16,867,725 | $ 16,867,725 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 5,018,400 | 5,018,400 | |
TOTAL MONEY MARKET FUNDS (Cost $21,886,125) | 21,886,125 | ||
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $785,772,488) | 761,423,329 | ||
NET OTHER ASSETS - 0.4% | 3,301,027 | ||
NET ASSETS - 100% | $ 764,724,356 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 461,642 |
Fidelity Securities Lending Cash Central Fund | 223,928 |
Total | $ 685,570 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $4,733,574) - See accompanying schedule: Unaffiliated issuers (cost $763,886,363) | $ 739,537,204 | |
Fidelity Central Funds (cost $21,886,125) | 21,886,125 | |
Total Investments (cost $785,772,488) | $ 761,423,329 | |
Foreign currency held at value (cost $198) | 200 | |
Receivable for investments sold | 11,424,878 | |
Receivable for fund shares sold | 1,669,006 | |
Dividends receivable | 2,622,301 | |
Distributions receivable from Fidelity Central Funds | 84,858 | |
Prepaid expenses | 2,788 | |
Other receivables | 485,547 | |
Total assets | 777,712,907 | |
Liabilities | ||
Payable for investments purchased | $ 5,375,694 | |
Payable for fund shares redeemed | 1,790,259 | |
Accrued management fee | 454,176 | |
Distribution fees payable | 6,264 | |
Other affiliated payables | 224,864 | |
Other payables and accrued expenses | 118,894 | |
Collateral on securities loaned, at value | 5,018,400 | |
Total liabilities | 12,988,551 | |
Net Assets | $ 764,724,356 | |
Net Assets consist of: | ||
Paid in capital | $ 883,825,880 | |
Distributions in excess of net investment income | (257,538) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (94,610,430) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (24,233,556) | |
Net Assets | $ 764,724,356 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.71 | |
Maximum offering price per share (100/94.25 of $12.71) | $ 13.49 | |
Class T: | $ 12.71 | |
Maximum offering price per share (100/96.50 of $12.71) | $ 13.17 | |
Class B: | $ 12.70 | |
Class C: | $ 12.69 | |
International Real Estate: | $ 12.75 | |
Institutional Class: | $ 12.73 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 11,053,804 | |
Interest | 17,902 | |
Income from Fidelity Central Funds | 685,570 | |
11,757,276 | ||
Less foreign taxes withheld | (761,327) | |
Total income | 10,995,949 | |
Expenses | ||
Management fee | $ 3,244,991 | |
Transfer agent fees | 1,195,795 | |
Distribution fees | 36,862 | |
Accounting and security lending fees | 218,354 | |
Custodian fees and expenses | 218,390 | |
Independent trustees' compensation | 2,033 | |
Registration fees | 38,467 | |
Audit | 39,576 | |
Legal | 3,890 | |
Interest | 23,066 | |
Miscellaneous | 27,893 | |
Total expenses before reductions | 5,049,317 | |
Expense reductions | (177,484) | 4,871,833 |
Net investment income (loss) | 6,124,116 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (6,086,736) | |
Foreign currency transactions | (100,275) | |
Total net realized gain (loss) | (6,187,011) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (74,743,397) | |
Assets and liabilities in foreign currencies | 41,236 | |
Total change in net unrealized appreciation (depreciation) | (74,702,161) | |
Net gain (loss) | (80,889,172) | |
Net increase (decrease) in net assets resulting from operations | $ (74,765,056) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 6,124,116 | $ 19,060,502 |
Net realized gain (loss) | (6,187,011) | 65,469,181 |
Change in net unrealized appreciation (depreciation) | (74,702,161) | 11,371,284 |
Net increase (decrease) in net assets resulting | (74,765,056) | 95,900,967 |
Distributions to shareholders from net investment income | (18,764,218) | (8,677,416) |
Distributions to shareholders from net realized gain | (91,321,117) | (61,685,812) |
Total distributions | (110,085,335) | (70,363,228) |
Share transactions - net increase (decrease) | (96,681,563) | 571,194,492 |
Redemption fees | 369,294 | 1,300,956 |
Total increase (decrease) in net assets | (281,162,660) | 598,033,187 |
Net Assets | ||
Beginning of period | 1,045,887,016 | 447,853,829 |
End of period (including distributions in excess of net investment income of $257,538 and undistributed net investment income of $15,501,269, respectively) | $ 764,724,356 | $ 1,045,887,016 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.71 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .08 | .11 |
Net realized and unrealized gain (loss) | (1.28) | (1.87) H |
Total from investment operations | (1.20) | (1.76) |
Distributions from net investment income | (.31) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.81) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 15.71 |
Total Return B,C,D | (8.17)% | (10.02)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 1.38% A | 1.37% A |
Expenses net of fee waivers, if any | 1.38% A | 1.37% A |
Expenses net of all reductions | 1.35% A | 1.26% A |
Net investment income (loss) | 1.04% A | 2.08% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 7,986 | $ 5,087 |
Portfolio turnover rate G | 65% A | 144% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.70 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .06 | .10 |
Net realized and unrealized gain (loss) | (1.28) | (1.87) H |
Total from investment operations | (1.22) | (1.77) |
Distributions from net investment income | (.28) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.78) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 15.70 |
Total Return B,C,D | (8.31)% | (10.08)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 1.64% A | 1.61% A |
Expenses net of fee waivers, if any | 1.64% A | 1.61% A |
Expenses net of all reductions | 1.61% A | 1.51% A |
Net investment income (loss) | .78% A | 1.90% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,739 | $ 2,398 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.67 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .02 | .07 |
Net realized and unrealized gain (loss) | (1.27) | (1.87) H |
Total from investment operations | (1.25) | (1.80) |
Distributions from net investment income | (.23) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.73) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.70 | $ 15.67 |
Total Return B,C,D | (8.53)% | (10.25)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 2.14% A | 2.11% A |
Expenses net of fee waivers, if any | 2.14% A | 2.11% A |
Expenses net of all reductions | 2.11% A | 2.01% A |
Net investment income (loss) | .28% A | 1.38% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,149 | $ 1,158 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.67 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .02 | .07 |
Net realized and unrealized gain (loss) | (1.27) | (1.87) H |
Total from investment operations | (1.25) | (1.80) |
Distributions from net investment income | (.24) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.74) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.69 | $ 15.67 |
Total Return B,C,D | (8.49)% | (10.25)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 2.14% A | 2.10% A |
Expenses net of fee waivers, if any | 2.14% A | 2.10% A |
Expenses net of all reductions | 2.11% A | 2.00% A |
Net investment income (loss) | .28% A | 1.35% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,248 | $ 2,629 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - International Real Estate
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.73 | $ 14.69 | $ 12.09 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | .10 | .31 | .30 | .23 |
Net realized and unrealized gain (loss) | (1.28) | 2.35 | 2.93 | 1.91 |
Total from investment operations | (1.18) | 2.66 | 3.23 | 2.14 |
Distributions from net investment income | (.31) | (.22) | (.24) | (.03) |
Distributions from net realized gain | (1.50) | (1.42) | (.40) | (.03) |
Total distributions | (1.81) | (1.64) | (.64) | (.06) |
Redemption fees added to paid in capital D | .01 | .02 | .01 | .01 |
Net asset value, end of period | $ 12.75 | $ 15.73 | $ 14.69 | $ 12.09 |
Total Return B,C | (8.04)% | 19.01% | 27.85% | 21.53% |
Ratios to Average Net Assets E,H | ||||
Expenses before reductions | 1.09% A | 1.07% | 1.12% | 1.29% A |
Expenses net of fee waivers, if any | 1.08% A | 1.06% | 1.12% | 1.29% A |
Expenses net of all reductions | 1.05% A | .96% | .91% | 1.27% A |
Net investment income (loss) | 1.34% A | 1.86% | 2.23% | 2.21% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 746,575 | $ 1,032,138 | $ 447,854 | $ 160,980 |
Portfolio turnover rate F | 65% A | 144% | 234% | 36% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period September 8, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 H | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.73 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) D | .09 | .12 |
Net realized and unrealized gain (loss) | (1.27) | (1.86) G |
Total from investment operations | (1.18) | (1.74) |
Distributions from net investment income | (.33) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.83) | - |
Redemption fees added to paid in capital D | .01 | .01 |
Net asset value, end of period | $ 12.73 | $ 15.73 |
Total Return B,C | (8.02)% | (9.91)% |
Ratios to Average Net Assets E,I | ||
Expenses before reductions | 1.13% A | 1.08% A |
Expenses net of fee waivers, if any | 1.13% A | 1.08% A |
Expenses net of all reductions | 1.10% A | .97% A |
Net investment income (loss) | 1.29% A | 2.27% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,027 | $ 2,477 |
Portfolio turnover rate F | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
H For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity International Real Estate Fund (the Fund) is a non-diversified fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers Class A, Class T, Class B, Class C, International Real Estate and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class. The Fund's investment 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 may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 66,222,806 |
Unrealized depreciation | (91,898,867) |
Net unrealized appreciation (depreciation) | $ (25,676,061) |
Cost for federal income tax purposes | $ 787,099,390 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
(including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $298,261,544 and $508,449,188, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .71% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 8,444 | $ 1,117 |
Class T | .25% | .25% | 6,808 | 158 |
Class B | .75% | .25% | 6,191 | 4,743 |
Class C | .75% | .25% | 15,419 | 11,824 |
$ 36,862 | $ 17,842 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges
Semiannual Report
Notes to Financial Statements - continued
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 9,842 |
Class T | 2,033 |
Class B* | 476 |
Class C* | 1,100 |
$ 13,451 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for International Real Estate. For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 10,165 | .30 |
Class T | 4,297 | .32 |
Class B | 1,955 | .32 |
Class C | 4,800 | .31 |
International Real Estate | 1,170,095 | .26 |
Institutional Class | 4,483 | .30 |
$ 1,195,795 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest |
Borrower | $ 12,036,923 | 5.31% | $ 23,066 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,463 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $223,928.
Semiannual Report
Notes to Financial Statements - continued
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of International Real Estate's operating expenses. During the period, this reimbursement reduced the class' expenses by $15,680.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $154,135 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1,039. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Class A | $ 66 |
International Real Estate | 6,563 |
Institutional Class | 1 |
$ 6,630 |
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.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 129,244 | $ - |
Class T | 47,714 | - |
Class B | 18,349 | - |
Class C | 47,789 | - |
International Real Estate | 18,458,446 | 8,677,416 |
Institutional Class | 62,676 | - |
Total | $ 18,764,218 | $ 8,677,416 |
Semiannual Report
11. Distributions to Shareholders - continued
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 682,544 | $ - |
Class T | 265,212 | - |
Class B | 121,612 | - |
Class C | 311,917 | - |
International Real Estate | 89,636,989 | 61,685,812 |
Institutional Class | 302,843 | - |
Total | $ 91,321,117 | $ 61,685,812 |
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended January 31, 2008 | Year ended | Six months ended January 31, 2008 | Year ended | |
Class A | ||||
Shares sold | 387,045 | 352,797 | $ 5,668,900 | $ 6,021,703 |
Reinvestment of distributions | 55,923 | - | 765,384 | - |
Shares redeemed | (138,723) | (28,946) | (1,921,634) | (470,996) |
Net increase (decrease) | 304,245 | 323,851 | $ 4,512,650 | $ 5,550,707 |
Class T | ||||
Shares sold | 83,131 | 163,911 | $ 1,227,257 | $ 2,804,594 |
Reinvestment of distributions | 21,513 | - | 296,970 | - |
Shares redeemed | (41,921) | (11,190) | (631,291) | (189,267) |
Net increase (decrease) | 62,723 | 152,721 | $ 892,936 | $ 2,615,327 |
Class B | ||||
Shares sold | 29,629 | 74,357 | $ 421,198 | $ 1,273,355 |
Reinvestment of distributions | 9,315 | - | 128,955 | - |
Shares redeemed | (22,360) | (460) | (318,657) | (7,526) |
Net increase (decrease) | 16,584 | 73,897 | $ 231,496 | $ 1,265,829 |
Class C | ||||
Shares sold | 106,703 | 188,521 | $ 1,525,121 | $ 3,213,374 |
Reinvestment of distributions | 24,057 | - | 331,349 | - |
Shares redeemed | (42,564) | (20,772) | (588,126) | (352,540) |
Net increase (decrease) | 88,196 | 167,749 | $ 1,268,344 | $ 2,860,834 |
Semiannual Report
Notes to Financial Statements - continued
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended January 31, 2008 | Year ended | Six months ended January 31, 2008 | Year ended | |
International Real Estate | ||||
Shares sold | 12,790,704 | 78,643,461 | $ 187,159,553 | $1,288,512,778 |
Reinvestment of distributions | 7,157,456 | 4,249,998 | 99,352,814 | 65,004,744 |
Shares redeemed | (27,029,865) | (47,753,325) | (391,367,437) | (797,297,400) |
Net increase (decrease) | (7,081,705) | 35,140,134 | $ (104,855,070) | $ 556,220,122 |
Institutional Class | ||||
Shares sold | 132,564 | 158,866 | $ 1,975,421 | $ 2,704,482 |
Reinvestment of distributions | 22,489 | - | 308,363 | - |
Shares redeemed | (74,704) | (1,378) | (1,015,703) | (22,809) |
Net increase (decrease) | 80,349 | 157,488 | $ 1,268,081 | $ 2,681,673 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
Semiannual Report
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Semiannual Report
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Fidelity Advisor
International Real Estate
Fund - Class A, Class T,
Class B, and Class C
Semiannual Report
January 31, 2008
Class A, Class T, Class B,
and Class C are classes
of Fidelity® International
Real Estate Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 918.30 | $ 6.65 |
Hypothetical A | $ 1,000.00 | $ 1,018.20 | $ 7.00 |
Class T | |||
Actual | $ 1,000.00 | $ 916.90 | $ 7.90 |
Hypothetical A | $ 1,000.00 | $ 1,016.89 | $ 8.31 |
Class B | |||
Actual | $ 1,000.00 | $ 914.70 | $ 10.30 |
Hypothetical A | $ 1,000.00 | $ 1,014.38 | $ 10.84 |
Class C | |||
Actual | $ 1,000.00 | $ 915.10 | $ 10.30 |
Hypothetical A | $ 1,000.00 | $ 1,014.38 | $ 10.84 |
International Real Estate | |||
Actual | $ 1,000.00 | $ 919.60 | $ 5.21 |
Hypothetical A | $ 1,000.00 | $ 1,019.71 | $ 5.48 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 919.80 | $ 5.45 |
Hypothetical A | $ 1,000.00 | $ 1,019.46 | $ 5.74 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.38% |
Class T | 1.64% |
Class B | 2.14% |
Class C | 2.14% |
International Real Estate | 1.08% |
Institutional Class | 1.13% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Sun Hung Kai Properties Ltd. | 7.7 | 2.3 |
Westfield Group unit | 7.4 | 4.0 |
British Land Co. PLC | 5.7 | 5.8 |
Unibail-Rodamco | 5.2 | 3.6 |
Mitsubishi Estate Co. Ltd. | 5.1 | 6.9 |
Land Securities Group PLC | 4.5 | 3.5 |
Mitsui Fudosan Co. Ltd. | 2.9 | 2.9 |
Babis Vovos International Technical SA | 2.8 | 2.1 |
Hammerson PLC | 2.7 | 0.0 |
CapitaLand Ltd. | 2.3 | 3.5 |
46.3 | ||
Top Five Countries as of January 31, 2008 | ||
(excluding cash equivalents) | % of fund's | % of fund's net assets |
Hong Kong | 20.6 | 17.6 |
United Kingdom | 17.5 | 15.2 |
Australia | 17.3 | 21.0 |
Japan | 15.3 | 17.3 |
France | 6.3 | 4.8 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top Five REIT Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
REITs - Management/Investment | 29.4 | 34.6 |
REITs - Office Buildings | 9.2 | 1.4 |
REITs - Shopping Centers | 4.3 | 2.2 |
REITs - Industrial Buildings | 2.5 | 0.7 |
REITs - Apartments | 1.5 | 1.5 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks and Investment Companies 96.7% | ![]() | Stocks and Investment Companies 98.5% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 96.7% | ** Foreign investments | 98.5% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% | |||
Shares | Value | ||
Australia - 17.3% | |||
Aspen Group unit | 2,618,506 | $ 4,320,105 | |
Centro Retail Group unit | 3,850,000 | 1,605,228 | |
CFS Retail Property Trust | 6,906,178 | 13,066,016 | |
Charter Hall Group unit | 4,886,485 | 6,944,625 | |
DB RREEF Trust unit | 9,165,011 | 13,025,224 | |
Goodman Group unit | 3,591,779 | 14,106,091 | |
Stockland Corp. Ltd. unit | 1,704,290 | 11,094,381 | |
The GPT Group unit | 3,331,129 | 11,200,713 | |
Westfield Group unit | 3,406,771 | 56,511,602 | |
TOTAL AUSTRALIA | 131,873,985 | ||
Bermuda - 0.5% | |||
HKC Holdings Ltd. | 19,259,000 | 4,025,953 | |
HKC Holdings Ltd. warrants 11/30/09 (a) | 1,510,900 | 58,131 | |
TOTAL BERMUDA | 4,084,084 | ||
Brazil - 0.9% | |||
Iguatemi Empresa de Shopping Centers SA | 325,000 | 4,766,913 | |
MRV Engenharia e Participacoes SA | 94,500 | 1,767,510 | |
TOTAL BRAZIL | 6,534,423 | ||
Cayman Islands - 0.9% | |||
New World China Land Ltd. (d) | 12,356,200 | 7,019,983 | |
China - 0.6% | |||
China Resources Land Ltd. | 2,644,000 | 4,597,995 | |
Cyprus - 0.5% | |||
Mirland Development Corp. PLC | 390,000 | 3,865,868 | |
Finland - 1.7% | |||
Citycon Oyj | 2,281,403 | 12,645,800 | |
France - 6.3% | |||
Fonciere Des Regions | 62,900 | 8,345,321 | |
Unibail-Rodamco | 168,717 | 40,043,328 | |
TOTAL FRANCE | 48,388,649 | ||
Germany - 1.7% | |||
DIC Asset AG | 191,960 | 5,672,168 | |
IVG Immobilien AG | 89,500 | 3,046,986 | |
Patrizia Immobilien AG (d) | 680,100 | 4,462,886 | |
TOTAL GERMANY | 13,182,040 | ||
Greece - 2.8% | |||
Babis Vovos International Technical SA (a) | 744,830 | 21,100,493 | |
Common Stocks - continued | |||
Shares | Value | ||
Hong Kong - 20.6% | |||
Cheung Kong Holdings Ltd. | 254,000 | $ 4,094,646 | |
China Overseas Land & Investment Ltd. | 7,986,000 | 13,478,222 | |
Hang Lung Properties Ltd. | 3,414,000 | 13,288,306 | |
Hong Kong Land Holdings Ltd. | 3,712,000 | 17,446,400 | |
Hysan Development Co. Ltd. | 3,673,032 | 10,763,619 | |
Kerry Properties Ltd. | 1,811,411 | 11,998,715 | |
Link (REIT) | 4,406,914 | 11,088,709 | |
Sino Land Co. | 5,552,000 | 16,732,650 | |
Sun Hung Kai Properties Ltd. | 3,001,000 | 58,692,583 | |
TOTAL HONG KONG | 157,583,850 | ||
Italy - 0.6% | |||
Immobiliare Grande Distribuzione SpA | 1,609,700 | 4,848,929 | |
Japan - 15.3% | |||
DA Office Investment Corp. | 466 | 2,480,542 | |
Kenedix Realty Investment Corp. | 911 | 5,868,852 | |
Mitsubishi Estate Co. Ltd. | 1,463,000 | 38,800,529 | |
Mitsui Fudosan Co. Ltd. | 984,000 | 22,487,728 | |
New City Residence Investment Corp. | 1,187 | 4,554,651 | |
Nippon Building Fund, Inc. | 1,037 | 11,995,768 | |
Nippon Residential Investment Corp. | 1,689 | 7,005,069 | |
NTT Urban Development Co. | 2,800 | 4,423,963 | |
Sankei Building Co. Ltd. (d) | 105,000 | 1,016,129 | |
Sumitomo Realty & Development Co. Ltd. | 602,000 | 14,805,136 | |
Tokyo Tatemono Co. Ltd. | 406,000 | 3,417,380 | |
TOTAL JAPAN | 116,855,747 | ||
Netherlands - 1.3% | |||
Eurocommercial Properties NV (Certificaten Van Aandelen) unit | 156,332 | 8,310,554 | |
VastNed Retail NV | 15,000 | 1,475,493 | |
TOTAL NETHERLANDS | 9,786,047 | ||
Norway - 0.5% | |||
Norwegian Property ASA | 407,000 | 4,121,397 | |
Philippines - 1.8% | |||
Ayala Land, Inc. | 24,856,760 | 8,613,729 | |
Filinvest Land, Inc. | 185,414,000 | 5,231,979 | |
TOTAL PHILIPPINES | 13,845,708 | ||
Common Stocks - continued | |||
Shares | Value | ||
Russia - 1.1% | |||
PIK Group: | |||
GDR | 263,600 | $ 7,512,600 | |
GDR (Reg. S) unit | 20,000 | 570,000 | |
TOTAL RUSSIA | 8,082,600 | ||
Singapore - 3.5% | |||
Ascendas Real Estate Investment Trust (A-REIT) | 2,887,000 | 4,421,164 | |
CapitaLand Ltd. | 4,322,900 | 17,999,372 | |
City Developments Ltd. | 586,000 | 4,673,112 | |
TOTAL SINGAPORE | 27,093,648 | ||
South Africa - 0.5% | |||
Resilient Property Income Fund Ltd. unit | 1,201,650 | 4,021,848 | |
United Kingdom - 17.5% | |||
British Land Co. PLC | 2,153,400 | 43,590,316 | |
Brixton PLC | 898,000 | 6,292,819 | |
Capital & Regional PLC | 577,000 | 5,375,438 | |
Derwent London PLC | 437,000 | 11,961,302 | |
Hammerson PLC | 893,500 | 20,302,766 | |
Land Securities Group PLC | 1,076,700 | 34,332,123 | |
Songbird Estates PLC Class B | 978,200 | 3,131,648 | |
Unite Group PLC | 1,324,000 | 8,793,444 | |
TOTAL UNITED KINGDOM | 133,779,856 | ||
TOTAL COMMON STOCKS (Cost $755,757,092) | 733,312,950 | ||
Investment Companies - 0.8% | |||
Luxembourg - 0.8% | |||
ProLogis European Properties Fund | 412,000 | 6,224,254 | |
Money Market Funds - 2.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 16,867,725 | $ 16,867,725 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 5,018,400 | 5,018,400 | |
TOTAL MONEY MARKET FUNDS (Cost $21,886,125) | 21,886,125 | ||
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $785,772,488) | 761,423,329 | ||
NET OTHER ASSETS - 0.4% | 3,301,027 | ||
NET ASSETS - 100% | $ 764,724,356 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 461,642 |
Fidelity Securities Lending Cash Central Fund | 223,928 |
Total | $ 685,570 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $4,733,574) - See accompanying schedule: Unaffiliated issuers (cost $763,886,363) | $ 739,537,204 | |
Fidelity Central Funds (cost $21,886,125) | 21,886,125 | |
Total Investments (cost $785,772,488) | $ 761,423,329 | |
Foreign currency held at value (cost $198) | 200 | |
Receivable for investments sold | 11,424,878 | |
Receivable for fund shares sold | 1,669,006 | |
Dividends receivable | 2,622,301 | |
Distributions receivable from Fidelity Central Funds | 84,858 | |
Prepaid expenses | 2,788 | |
Other receivables | 485,547 | |
Total assets | 777,712,907 | |
Liabilities | ||
Payable for investments purchased | $ 5,375,694 | |
Payable for fund shares redeemed | 1,790,259 | |
Accrued management fee | 454,176 | |
Distribution fees payable | 6,264 | |
Other affiliated payables | 224,864 | |
Other payables and accrued expenses | 118,894 | |
Collateral on securities loaned, at value | 5,018,400 | |
Total liabilities | 12,988,551 | |
Net Assets | $ 764,724,356 | |
Net Assets consist of: | ||
Paid in capital | $ 883,825,880 | |
Distributions in excess of net investment income | (257,538) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (94,610,430) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (24,233,556) | |
Net Assets | $ 764,724,356 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.71 | |
Maximum offering price per share (100/94.25 of $12.71) | $ 13.49 | |
Class T: | $ 12.71 | |
Maximum offering price per share (100/96.50 of $12.71) | $ 13.17 | |
Class B: | $ 12.70 | |
Class C: | $ 12.69 | |
International Real Estate: | $ 12.75 | |
Institutional Class: | $ 12.73 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 11,053,804 | |
Interest | 17,902 | |
Income from Fidelity Central Funds | 685,570 | |
11,757,276 | ||
Less foreign taxes withheld | (761,327) | |
Total income | 10,995,949 | |
Expenses | ||
Management fee | $ 3,244,991 | |
Transfer agent fees | 1,195,795 | |
Distribution fees | 36,862 | |
Accounting and security lending fees | 218,354 | |
Custodian fees and expenses | 218,390 | |
Independent trustees' compensation | 2,033 | |
Registration fees | 38,467 | |
Audit | 39,576 | |
Legal | 3,890 | |
Interest | 23,066 | |
Miscellaneous | 27,893 | |
Total expenses before reductions | 5,049,317 | |
Expense reductions | (177,484) | 4,871,833 |
Net investment income (loss) | 6,124,116 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (6,086,736) | |
Foreign currency transactions | (100,275) | |
Total net realized gain (loss) | (6,187,011) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (74,743,397) | |
Assets and liabilities in foreign currencies | 41,236 | |
Total change in net unrealized appreciation (depreciation) | (74,702,161) | |
Net gain (loss) | (80,889,172) | |
Net increase (decrease) in net assets resulting from operations | $ (74,765,056) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 6,124,116 | $ 19,060,502 |
Net realized gain (loss) | (6,187,011) | 65,469,181 |
Change in net unrealized appreciation (depreciation) | (74,702,161) | 11,371,284 |
Net increase (decrease) in net assets resulting | (74,765,056) | 95,900,967 |
Distributions to shareholders from net investment income | (18,764,218) | (8,677,416) |
Distributions to shareholders from net realized gain | (91,321,117) | (61,685,812) |
Total distributions | (110,085,335) | (70,363,228) |
Share transactions - net increase (decrease) | (96,681,563) | 571,194,492 |
Redemption fees | 369,294 | 1,300,956 |
Total increase (decrease) in net assets | (281,162,660) | 598,033,187 |
Net Assets | ||
Beginning of period | 1,045,887,016 | 447,853,829 |
End of period (including distributions in excess of net investment income of $257,538 and undistributed net investment income of $15,501,269, respectively) | $ 764,724,356 | $ 1,045,887,016 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.71 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .08 | .11 |
Net realized and unrealized gain (loss) | (1.28) | (1.87) H |
Total from investment operations | (1.20) | (1.76) |
Distributions from net investment income | (.31) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.81) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 15.71 |
Total Return B,C,D | (8.17)% | (10.02)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 1.38% A | 1.37% A |
Expenses net of fee waivers, if any | 1.38% A | 1.37% A |
Expenses net of all reductions | 1.35% A | 1.26% A |
Net investment income (loss) | 1.04% A | 2.08% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 7,986 | $ 5,087 |
Portfolio turnover rate G | 65% A | 144% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.70 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .06 | .10 |
Net realized and unrealized gain (loss) | (1.28) | (1.87) H |
Total from investment operations | (1.22) | (1.77) |
Distributions from net investment income | (.28) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.78) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 15.70 |
Total Return B,C,D | (8.31)% | (10.08)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 1.64% A | 1.61% A |
Expenses net of fee waivers, if any | 1.64% A | 1.61% A |
Expenses net of all reductions | 1.61% A | 1.51% A |
Net investment income (loss) | .78% A | 1.90% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,739 | $ 2,398 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.67 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .02 | .07 |
Net realized and unrealized gain (loss) | (1.27) | (1.87) H |
Total from investment operations | (1.25) | (1.80) |
Distributions from net investment income | (.23) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.73) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.70 | $ 15.67 |
Total Return B,C,D | (8.53)% | (10.25)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 2.14% A | 2.11% A |
Expenses net of fee waivers, if any | 2.14% A | 2.11% A |
Expenses net of all reductions | 2.11% A | 2.01% A |
Net investment income (loss) | .28% A | 1.38% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,149 | $ 1,158 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.67 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .02 | .07 |
Net realized and unrealized gain (loss) | (1.27) | (1.87) H |
Total from investment operations | (1.25) | (1.80) |
Distributions from net investment income | (.24) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.74) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.69 | $ 15.67 |
Total Return B,C,D | (8.49)% | (10.25)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 2.14% A | 2.10% A |
Expenses net of fee waivers, if any | 2.14% A | 2.10% A |
Expenses net of all reductions | 2.11% A | 2.00% A |
Net investment income (loss) | .28% A | 1.35% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,248 | $ 2,629 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - International Real Estate
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.73 | $ 14.69 | $ 12.09 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | .10 | .31 | .30 | .23 |
Net realized and unrealized gain (loss) | (1.28) | 2.35 | 2.93 | 1.91 |
Total from investment operations | (1.18) | 2.66 | 3.23 | 2.14 |
Distributions from net investment income | (.31) | (.22) | (.24) | (.03) |
Distributions from net realized gain | (1.50) | (1.42) | (.40) | (.03) |
Total distributions | (1.81) | (1.64) | (.64) | (.06) |
Redemption fees added to paid in capital D | .01 | .02 | .01 | .01 |
Net asset value, end of period | $ 12.75 | $ 15.73 | $ 14.69 | $ 12.09 |
Total Return B,C | (8.04)% | 19.01% | 27.85% | 21.53% |
Ratios to Average Net Assets E,H | ||||
Expenses before reductions | 1.09% A | 1.07% | 1.12% | 1.29% A |
Expenses net of fee waivers, if any | 1.08% A | 1.06% | 1.12% | 1.29% A |
Expenses net of all reductions | 1.05% A | .96% | .91% | 1.27% A |
Net investment income (loss) | 1.34% A | 1.86% | 2.23% | 2.21% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 746,575 | $ 1,032,138 | $ 447,854 | $ 160,980 |
Portfolio turnover rate F | 65% A | 144% | 234% | 36% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period September 8, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 H | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.73 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) D | .09 | .12 |
Net realized and unrealized gain (loss) | (1.27) | (1.86) G |
Total from investment operations | (1.18) | (1.74) |
Distributions from net investment income | (.33) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.83) | - |
Redemption fees added to paid in capital D | .01 | .01 |
Net asset value, end of period | $ 12.73 | $ 15.73 |
Total Return B,C | (8.02)% | (9.91)% |
Ratios to Average Net Assets E,I | ||
Expenses before reductions | 1.13% A | 1.08% A |
Expenses net of fee waivers, if any | 1.13% A | 1.08% A |
Expenses net of all reductions | 1.10% A | .97% A |
Net investment income (loss) | 1.29% A | 2.27% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,027 | $ 2,477 |
Portfolio turnover rate F | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
H For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity International Real Estate Fund (the Fund) is a non-diversified fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers Class A, Class T, Class B, Class C, International Real Estate and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class. The Fund's investment 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 may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results
Semiannual Report
3. Significant Accounting Policies - continued
could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 66,222,806 |
Unrealized depreciation | (91,898,867) |
Net unrealized appreciation (depreciation) | $ (25,676,061) |
Cost for federal income tax purposes | $ 787,099,390 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement
Semiannual Report
Notes to Financial Statements - continued
4. Operating Policies - continued
Repurchase Agreements - continued
(including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $298,261,544 and $508,449,188, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .71% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 8,444 | $ 1,117 |
Class T | .25% | .25% | 6,808 | 158 |
Class B | .75% | .25% | 6,191 | 4,743 |
Class C | .75% | .25% | 15,419 | 11,824 |
$ 36,862 | $ 17,842 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 9,842 |
Class T | 2,033 |
Class B* | 476 |
Class C* | 1,100 |
$ 13,451 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for International Real Estate. For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 10,165 | .30 |
Class T | 4,297 | .32 |
Class B | 1,955 | .32 |
Class C | 4,800 | .31 |
International Real Estate | 1,170,095 | .26 |
Institutional Class | 4,483 | .30 |
$ 1,195,795 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements - continued
6. Fees and Other Transactions with Affiliates - continued
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest |
Borrower | $ 12,036,923 | 5.31% | $ 23,066 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,463 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $223,928.
Semiannual Report
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of International Real Estate's operating expenses. During the period, this reimbursement reduced the class' expenses by $15,680.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $154,135 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1,039. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Class A | $ 66 |
International Real Estate | 6,563 |
Institutional Class | 1 |
$ 6,630 |
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.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 129,244 | $ - |
Class T | 47,714 | - |
Class B | 18,349 | - |
Class C | 47,789 | - |
International Real Estate | 18,458,446 | 8,677,416 |
Institutional Class | 62,676 | - |
Total | $ 18,764,218 | $ 8,677,416 |
Semiannual Report
Notes to Financial Statements - continued
11. Distributions to Shareholders - continued
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 682,544 | $ - |
Class T | 265,212 | - |
Class B | 121,612 | - |
Class C | 311,917 | - |
International Real Estate | 89,636,989 | 61,685,812 |
Institutional Class | 302,843 | - |
Total | $ 91,321,117 | $ 61,685,812 |
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended January 31, 2008 | Year ended | Six months ended January 31, 2008 | Year ended | |
Class A | ||||
Shares sold | 387,045 | 352,797 | $ 5,668,900 | $ 6,021,703 |
Reinvestment of distributions | 55,923 | - | 765,384 | - |
Shares redeemed | (138,723) | (28,946) | (1,921,634) | (470,996) |
Net increase (decrease) | 304,245 | 323,851 | $ 4,512,650 | $ 5,550,707 |
Class T | ||||
Shares sold | 83,131 | 163,911 | $ 1,227,257 | $ 2,804,594 |
Reinvestment of distributions | 21,513 | - | 296,970 | - |
Shares redeemed | (41,921) | (11,190) | (631,291) | (189,267) |
Net increase (decrease) | 62,723 | 152,721 | $ 892,936 | $ 2,615,327 |
Class B | ||||
Shares sold | 29,629 | 74,357 | $ 421,198 | $ 1,273,355 |
Reinvestment of distributions | 9,315 | - | 128,955 | - |
Shares redeemed | (22,360) | (460) | (318,657) | (7,526) |
Net increase (decrease) | 16,584 | 73,897 | $ 231,496 | $ 1,265,829 |
Class C | ||||
Shares sold | 106,703 | 188,521 | $ 1,525,121 | $ 3,213,374 |
Reinvestment of distributions | 24,057 | - | 331,349 | - |
Shares redeemed | (42,564) | (20,772) | (588,126) | (352,540) |
Net increase (decrease) | 88,196 | 167,749 | $ 1,268,344 | $ 2,860,834 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended January 31, 2008 | Year ended | Six months ended January 31, 2008 | Year ended | |
International Real Estate | ||||
Shares sold | 12,790,704 | 78,643,461 | $ 187,159,553 | $1,288,512,778 |
Reinvestment of distributions | 7,157,456 | 4,249,998 | 99,352,814 | 65,004,744 |
Shares redeemed | (27,029,865) | (47,753,325) | (391,367,437) | (797,297,400) |
Net increase (decrease) | (7,081,705) | 35,140,134 | $ (104,855,070) | $ 556,220,122 |
Institutional Class | ||||
Shares sold | 132,564 | 158,866 | $ 1,975,421 | $ 2,704,482 |
Reinvestment of distributions | 22,489 | - | 308,363 | - |
Shares redeemed | (74,704) | (1,378) | (1,015,703) | (22,809) |
Net increase (decrease) | 80,349 | 157,488 | $ 1,268,081 | $ 2,681,673 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
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Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Research & Analysis Company
Fidelity Management & Research
(U.K.) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisers
Fidelity International Investment
Advisers (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Mellon Bank, N.A.
Pittsburgh, PA
AIRE-USAN-0308
1.843181.100
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
International Real Estate
Fund - Institutional Class
Semiannual Report
January 31, 2008
Institutional Class is a
class of Fidelity®
International Real Estate Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 918.30 | $ 6.65 |
Hypothetical A | $ 1,000.00 | $ 1,018.20 | $ 7.00 |
Class T | |||
Actual | $ 1,000.00 | $ 916.90 | $ 7.90 |
Hypothetical A | $ 1,000.00 | $ 1,016.89 | $ 8.31 |
Class B | |||
Actual | $ 1,000.00 | $ 914.70 | $ 10.30 |
Hypothetical A | $ 1,000.00 | $ 1,014.38 | $ 10.84 |
Class C | |||
Actual | $ 1,000.00 | $ 915.10 | $ 10.30 |
Hypothetical A | $ 1,000.00 | $ 1,014.38 | $ 10.84 |
International Real Estate | |||
Actual | $ 1,000.00 | $ 919.60 | $ 5.21 |
Hypothetical A | $ 1,000.00 | $ 1,019.71 | $ 5.48 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 919.80 | $ 5.45 |
Hypothetical A | $ 1,000.00 | $ 1,019.46 | $ 5.74 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.38% |
Class T | 1.64% |
Class B | 2.14% |
Class C | 2.14% |
International Real Estate | 1.08% |
Institutional Class | 1.13% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Sun Hung Kai Properties Ltd. | 7.7 | 2.3 |
Westfield Group unit | 7.4 | 4.0 |
British Land Co. PLC | 5.7 | 5.8 |
Unibail-Rodamco | 5.2 | 3.6 |
Mitsubishi Estate Co. Ltd. | 5.1 | 6.9 |
Land Securities Group PLC | 4.5 | 3.5 |
Mitsui Fudosan Co. Ltd. | 2.9 | 2.9 |
Babis Vovos International Technical SA | 2.8 | 2.1 |
Hammerson PLC | 2.7 | 0.0 |
CapitaLand Ltd. | 2.3 | 3.5 |
46.3 | ||
Top Five Countries as of January 31, 2008 | ||
(excluding cash equivalents) | % of fund's | % of fund's net assets |
Hong Kong | 20.6 | 17.6 |
United Kingdom | 17.5 | 15.2 |
Australia | 17.3 | 21.0 |
Japan | 15.3 | 17.3 |
France | 6.3 | 4.8 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top Five REIT Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
REITs - Management/Investment | 29.4 | 34.6 |
REITs - Office Buildings | 9.2 | 1.4 |
REITs - Shopping Centers | 4.3 | 2.2 |
REITs - Industrial Buildings | 2.5 | 0.7 |
REITs - Apartments | 1.5 | 1.5 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks and Investment Companies 96.7% | ![]() | Stocks and Investment Companies 98.5% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 96.7% | ** Foreign investments | 98.5% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% | |||
Shares | Value | ||
Australia - 17.3% | |||
Aspen Group unit | 2,618,506 | $ 4,320,105 | |
Centro Retail Group unit | 3,850,000 | 1,605,228 | |
CFS Retail Property Trust | 6,906,178 | 13,066,016 | |
Charter Hall Group unit | 4,886,485 | 6,944,625 | |
DB RREEF Trust unit | 9,165,011 | 13,025,224 | |
Goodman Group unit | 3,591,779 | 14,106,091 | |
Stockland Corp. Ltd. unit | 1,704,290 | 11,094,381 | |
The GPT Group unit | 3,331,129 | 11,200,713 | |
Westfield Group unit | 3,406,771 | 56,511,602 | |
TOTAL AUSTRALIA | 131,873,985 | ||
Bermuda - 0.5% | |||
HKC Holdings Ltd. | 19,259,000 | 4,025,953 | |
HKC Holdings Ltd. warrants 11/30/09 (a) | 1,510,900 | 58,131 | |
TOTAL BERMUDA | 4,084,084 | ||
Brazil - 0.9% | |||
Iguatemi Empresa de Shopping Centers SA | 325,000 | 4,766,913 | |
MRV Engenharia e Participacoes SA | 94,500 | 1,767,510 | |
TOTAL BRAZIL | 6,534,423 | ||
Cayman Islands - 0.9% | |||
New World China Land Ltd. (d) | 12,356,200 | 7,019,983 | |
China - 0.6% | |||
China Resources Land Ltd. | 2,644,000 | 4,597,995 | |
Cyprus - 0.5% | |||
Mirland Development Corp. PLC | 390,000 | 3,865,868 | |
Finland - 1.7% | |||
Citycon Oyj | 2,281,403 | 12,645,800 | |
France - 6.3% | |||
Fonciere Des Regions | 62,900 | 8,345,321 | |
Unibail-Rodamco | 168,717 | 40,043,328 | |
TOTAL FRANCE | 48,388,649 | ||
Germany - 1.7% | |||
DIC Asset AG | 191,960 | 5,672,168 | |
IVG Immobilien AG | 89,500 | 3,046,986 | |
Patrizia Immobilien AG (d) | 680,100 | 4,462,886 | |
TOTAL GERMANY | 13,182,040 | ||
Greece - 2.8% | |||
Babis Vovos International Technical SA (a) | 744,830 | 21,100,493 | |
Common Stocks - continued | |||
Shares | Value | ||
Hong Kong - 20.6% | |||
Cheung Kong Holdings Ltd. | 254,000 | $ 4,094,646 | |
China Overseas Land & Investment Ltd. | 7,986,000 | 13,478,222 | |
Hang Lung Properties Ltd. | 3,414,000 | 13,288,306 | |
Hong Kong Land Holdings Ltd. | 3,712,000 | 17,446,400 | |
Hysan Development Co. Ltd. | 3,673,032 | 10,763,619 | |
Kerry Properties Ltd. | 1,811,411 | 11,998,715 | |
Link (REIT) | 4,406,914 | 11,088,709 | |
Sino Land Co. | 5,552,000 | 16,732,650 | |
Sun Hung Kai Properties Ltd. | 3,001,000 | 58,692,583 | |
TOTAL HONG KONG | 157,583,850 | ||
Italy - 0.6% | |||
Immobiliare Grande Distribuzione SpA | 1,609,700 | 4,848,929 | |
Japan - 15.3% | |||
DA Office Investment Corp. | 466 | 2,480,542 | |
Kenedix Realty Investment Corp. | 911 | 5,868,852 | |
Mitsubishi Estate Co. Ltd. | 1,463,000 | 38,800,529 | |
Mitsui Fudosan Co. Ltd. | 984,000 | 22,487,728 | |
New City Residence Investment Corp. | 1,187 | 4,554,651 | |
Nippon Building Fund, Inc. | 1,037 | 11,995,768 | |
Nippon Residential Investment Corp. | 1,689 | 7,005,069 | |
NTT Urban Development Co. | 2,800 | 4,423,963 | |
Sankei Building Co. Ltd. (d) | 105,000 | 1,016,129 | |
Sumitomo Realty & Development Co. Ltd. | 602,000 | 14,805,136 | |
Tokyo Tatemono Co. Ltd. | 406,000 | 3,417,380 | |
TOTAL JAPAN | 116,855,747 | ||
Netherlands - 1.3% | |||
Eurocommercial Properties NV (Certificaten Van Aandelen) unit | 156,332 | 8,310,554 | |
VastNed Retail NV | 15,000 | 1,475,493 | |
TOTAL NETHERLANDS | 9,786,047 | ||
Norway - 0.5% | |||
Norwegian Property ASA | 407,000 | 4,121,397 | |
Philippines - 1.8% | |||
Ayala Land, Inc. | 24,856,760 | 8,613,729 | |
Filinvest Land, Inc. | 185,414,000 | 5,231,979 | |
TOTAL PHILIPPINES | 13,845,708 | ||
Common Stocks - continued | |||
Shares | Value | ||
Russia - 1.1% | |||
PIK Group: | |||
GDR | 263,600 | $ 7,512,600 | |
GDR (Reg. S) unit | 20,000 | 570,000 | |
TOTAL RUSSIA | 8,082,600 | ||
Singapore - 3.5% | |||
Ascendas Real Estate Investment Trust (A-REIT) | 2,887,000 | 4,421,164 | |
CapitaLand Ltd. | 4,322,900 | 17,999,372 | |
City Developments Ltd. | 586,000 | 4,673,112 | |
TOTAL SINGAPORE | 27,093,648 | ||
South Africa - 0.5% | |||
Resilient Property Income Fund Ltd. unit | 1,201,650 | 4,021,848 | |
United Kingdom - 17.5% | |||
British Land Co. PLC | 2,153,400 | 43,590,316 | |
Brixton PLC | 898,000 | 6,292,819 | |
Capital & Regional PLC | 577,000 | 5,375,438 | |
Derwent London PLC | 437,000 | 11,961,302 | |
Hammerson PLC | 893,500 | 20,302,766 | |
Land Securities Group PLC | 1,076,700 | 34,332,123 | |
Songbird Estates PLC Class B | 978,200 | 3,131,648 | |
Unite Group PLC | 1,324,000 | 8,793,444 | |
TOTAL UNITED KINGDOM | 133,779,856 | ||
TOTAL COMMON STOCKS (Cost $755,757,092) | 733,312,950 | ||
Investment Companies - 0.8% | |||
Luxembourg - 0.8% | |||
ProLogis European Properties Fund | 412,000 | 6,224,254 | |
Money Market Funds - 2.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 16,867,725 | $ 16,867,725 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 5,018,400 | 5,018,400 | |
TOTAL MONEY MARKET FUNDS (Cost $21,886,125) | 21,886,125 | ||
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $785,772,488) | 761,423,329 | ||
NET OTHER ASSETS - 0.4% | 3,301,027 | ||
NET ASSETS - 100% | $ 764,724,356 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 461,642 |
Fidelity Securities Lending Cash Central Fund | 223,928 |
Total | $ 685,570 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $4,733,574) - See accompanying schedule: Unaffiliated issuers (cost $763,886,363) | $ 739,537,204 | |
Fidelity Central Funds (cost $21,886,125) | 21,886,125 | |
Total Investments (cost $785,772,488) | $ 761,423,329 | |
Foreign currency held at value (cost $198) | 200 | |
Receivable for investments sold | 11,424,878 | |
Receivable for fund shares sold | 1,669,006 | |
Dividends receivable | 2,622,301 | |
Distributions receivable from Fidelity Central Funds | 84,858 | |
Prepaid expenses | 2,788 | |
Other receivables | 485,547 | |
Total assets | 777,712,907 | |
Liabilities | ||
Payable for investments purchased | $ 5,375,694 | |
Payable for fund shares redeemed | 1,790,259 | |
Accrued management fee | 454,176 | |
Distribution fees payable | 6,264 | |
Other affiliated payables | 224,864 | |
Other payables and accrued expenses | 118,894 | |
Collateral on securities loaned, at value | 5,018,400 | |
Total liabilities | 12,988,551 | |
Net Assets | $ 764,724,356 | |
Net Assets consist of: | ||
Paid in capital | $ 883,825,880 | |
Distributions in excess of net investment income | (257,538) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (94,610,430) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (24,233,556) | |
Net Assets | $ 764,724,356 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.71 | |
Maximum offering price per share (100/94.25 of $12.71) | $ 13.49 | |
Class T: | $ 12.71 | |
Maximum offering price per share (100/96.50 of $12.71) | $ 13.17 | |
Class B: | $ 12.70 | |
Class C: | $ 12.69 | |
International Real Estate: | $ 12.75 | |
Institutional Class: | $ 12.73 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 11,053,804 | |
Interest | 17,902 | |
Income from Fidelity Central Funds | 685,570 | |
11,757,276 | ||
Less foreign taxes withheld | (761,327) | |
Total income | 10,995,949 | |
Expenses | ||
Management fee | $ 3,244,991 | |
Transfer agent fees | 1,195,795 | |
Distribution fees | 36,862 | |
Accounting and security lending fees | 218,354 | |
Custodian fees and expenses | 218,390 | |
Independent trustees' compensation | 2,033 | |
Registration fees | 38,467 | |
Audit | 39,576 | |
Legal | 3,890 | |
Interest | 23,066 | |
Miscellaneous | 27,893 | |
Total expenses before reductions | 5,049,317 | |
Expense reductions | (177,484) | 4,871,833 |
Net investment income (loss) | 6,124,116 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (6,086,736) | |
Foreign currency transactions | (100,275) | |
Total net realized gain (loss) | (6,187,011) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (74,743,397) | |
Assets and liabilities in foreign currencies | 41,236 | |
Total change in net unrealized appreciation (depreciation) | (74,702,161) | |
Net gain (loss) | (80,889,172) | |
Net increase (decrease) in net assets resulting from operations | $ (74,765,056) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 6,124,116 | $ 19,060,502 |
Net realized gain (loss) | (6,187,011) | 65,469,181 |
Change in net unrealized appreciation (depreciation) | (74,702,161) | 11,371,284 |
Net increase (decrease) in net assets resulting | (74,765,056) | 95,900,967 |
Distributions to shareholders from net investment income | (18,764,218) | (8,677,416) |
Distributions to shareholders from net realized gain | (91,321,117) | (61,685,812) |
Total distributions | (110,085,335) | (70,363,228) |
Share transactions - net increase (decrease) | (96,681,563) | 571,194,492 |
Redemption fees | 369,294 | 1,300,956 |
Total increase (decrease) in net assets | (281,162,660) | 598,033,187 |
Net Assets | ||
Beginning of period | 1,045,887,016 | 447,853,829 |
End of period (including distributions in excess of net investment income of $257,538 and undistributed net investment income of $15,501,269, respectively) | $ 764,724,356 | $ 1,045,887,016 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.71 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .08 | .11 |
Net realized and unrealized gain (loss) | (1.28) | (1.87) H |
Total from investment operations | (1.20) | (1.76) |
Distributions from net investment income | (.31) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.81) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 15.71 |
Total Return B,C,D | (8.17)% | (10.02)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 1.38% A | 1.37% A |
Expenses net of fee waivers, if any | 1.38% A | 1.37% A |
Expenses net of all reductions | 1.35% A | 1.26% A |
Net investment income (loss) | 1.04% A | 2.08% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 7,986 | $ 5,087 |
Portfolio turnover rate G | 65% A | 144% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.70 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .06 | .10 |
Net realized and unrealized gain (loss) | (1.28) | (1.87) H |
Total from investment operations | (1.22) | (1.77) |
Distributions from net investment income | (.28) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.78) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 15.70 |
Total Return B,C,D | (8.31)% | (10.08)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 1.64% A | 1.61% A |
Expenses net of fee waivers, if any | 1.64% A | 1.61% A |
Expenses net of all reductions | 1.61% A | 1.51% A |
Net investment income (loss) | .78% A | 1.90% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 2,739 | $ 2,398 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.67 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .02 | .07 |
Net realized and unrealized gain (loss) | (1.27) | (1.87) H |
Total from investment operations | (1.25) | (1.80) |
Distributions from net investment income | (.23) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.73) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.70 | $ 15.67 |
Total Return B,C,D | (8.53)% | (10.25)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 2.14% A | 2.11% A |
Expenses net of fee waivers, if any | 2.14% A | 2.11% A |
Expenses net of all reductions | 2.11% A | 2.01% A |
Net investment income (loss) | .28% A | 1.38% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,149 | $ 1,158 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 I | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.67 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) E | .02 | .07 |
Net realized and unrealized gain (loss) | (1.27) | (1.87) H |
Total from investment operations | (1.25) | (1.80) |
Distributions from net investment income | (.24) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.74) | - |
Redemption fees added to paid in capital E | .01 | .01 |
Net asset value, end of period | $ 12.69 | $ 15.67 |
Total Return B,C,D | (8.49)% | (10.25)% |
Ratios to Average Net Assets F,J | ||
Expenses before reductions | 2.14% A | 2.10% A |
Expenses net of fee waivers, if any | 2.14% A | 2.10% A |
Expenses net of all reductions | 2.11% A | 2.00% A |
Net investment income (loss) | .28% A | 1.35% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,248 | $ 2,629 |
Portfolio turnover rate G | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - International Real Estate
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.73 | $ 14.69 | $ 12.09 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | .10 | .31 | .30 | .23 |
Net realized and unrealized gain (loss) | (1.28) | 2.35 | 2.93 | 1.91 |
Total from investment operations | (1.18) | 2.66 | 3.23 | 2.14 |
Distributions from net investment income | (.31) | (.22) | (.24) | (.03) |
Distributions from net realized gain | (1.50) | (1.42) | (.40) | (.03) |
Total distributions | (1.81) | (1.64) | (.64) | (.06) |
Redemption fees added to paid in capital D | .01 | .02 | .01 | .01 |
Net asset value, end of period | $ 12.75 | $ 15.73 | $ 14.69 | $ 12.09 |
Total Return B,C | (8.04)% | 19.01% | 27.85% | 21.53% |
Ratios to Average Net Assets E,H | ||||
Expenses before reductions | 1.09% A | 1.07% | 1.12% | 1.29% A |
Expenses net of fee waivers, if any | 1.08% A | 1.06% | 1.12% | 1.29% A |
Expenses net of all reductions | 1.05% A | .96% | .91% | 1.27% A |
Net investment income (loss) | 1.34% A | 1.86% | 2.23% | 2.21% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 746,575 | $ 1,032,138 | $ 447,854 | $ 160,980 |
Portfolio turnover rate F | 65% A | 144% | 234% | 36% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period September 8, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended January 31, 2008 | Year ended July 31, | |
(Unaudited) | 2007 H | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 15.73 | $ 17.46 |
Income from Investment Operations | ||
Net investment income (loss) D | .09 | .12 |
Net realized and unrealized gain (loss) | (1.27) | (1.86) G |
Total from investment operations | (1.18) | (1.74) |
Distributions from net investment income | (.33) | - |
Distributions from net realized gain | (1.50) | - |
Total distributions | (1.83) | - |
Redemption fees added to paid in capital D | .01 | .01 |
Net asset value, end of period | $ 12.73 | $ 15.73 |
Total Return B,C | (8.02)% | (9.91)% |
Ratios to Average Net Assets E,I | ||
Expenses before reductions | 1.13% A | 1.08% A |
Expenses net of fee waivers, if any | 1.13% A | 1.08% A |
Expenses net of all reductions | 1.10% A | .97% A |
Net investment income (loss) | 1.29% A | 2.27% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 3,027 | $ 2,477 |
Portfolio turnover rate F | 65% A | 144% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
H For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity International Real Estate Fund (the Fund) is a non-diversified fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers Class A, Class T, Class B, Class C, International Real Estate and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class. The Fund's investment 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 may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results
Semiannual Report
3. Significant Accounting Policies - continued
could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 66,222,806 |
Unrealized depreciation | (91,898,867) |
Net unrealized appreciation (depreciation) | $ (25,676,061) |
Cost for federal income tax purposes | $ 787,099,390 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement
Semiannual Report
Notes to Financial Statements - continued
4. Operating Policies - continued
Repurchase Agreements - continued
(including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $298,261,544 and $508,449,188, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .71% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 8,444 | $ 1,117 |
Class T | .25% | .25% | 6,808 | 158 |
Class B | .75% | .25% | 6,191 | 4,743 |
Class C | .75% | .25% | 15,419 | 11,824 |
$ 36,862 | $ 17,842 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 9,842 |
Class T | 2,033 |
Class B* | 476 |
Class C* | 1,100 |
$ 13,451 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for International Real Estate. For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 10,165 | .30 |
Class T | 4,297 | .32 |
Class B | 1,955 | .32 |
Class C | 4,800 | .31 |
International Real Estate | 1,170,095 | .26 |
Institutional Class | 4,483 | .30 |
$ 1,195,795 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements - continued
6. Fees and Other Transactions with Affiliates - continued
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest |
Borrower | $ 12,036,923 | 5.31% | $ 23,066 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,463 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $223,928.
Semiannual Report
9. Expense Reductions.
FMR voluntarily agreed to reimburse a portion of International Real Estate's operating expenses. During the period, this reimbursement reduced the class' expenses by $15,680.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $154,135 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1,039. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Class A | $ 66 |
International Real Estate | 6,563 |
Institutional Class | 1 |
$ 6,630 |
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.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net investment income | ||
Class A | $ 129,244 | $ - |
Class T | 47,714 | - |
Class B | 18,349 | - |
Class C | 47,789 | - |
International Real Estate | 18,458,446 | 8,677,416 |
Institutional Class | 62,676 | - |
Total | $ 18,764,218 | $ 8,677,416 |
Semiannual Report
Notes to Financial Statements - continued
11. Distributions to Shareholders - continued
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 682,544 | $ - |
Class T | 265,212 | - |
Class B | 121,612 | - |
Class C | 311,917 | - |
International Real Estate | 89,636,989 | 61,685,812 |
Institutional Class | 302,843 | - |
Total | $ 91,321,117 | $ 61,685,812 |
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended January 31, 2008 | Year ended | Six months ended January 31, 2008 | Year ended | |
Class A | ||||
Shares sold | 387,045 | 352,797 | $ 5,668,900 | $ 6,021,703 |
Reinvestment of distributions | 55,923 | - | 765,384 | - |
Shares redeemed | (138,723) | (28,946) | (1,921,634) | (470,996) |
Net increase (decrease) | 304,245 | 323,851 | $ 4,512,650 | $ 5,550,707 |
Class T | ||||
Shares sold | 83,131 | 163,911 | $ 1,227,257 | $ 2,804,594 |
Reinvestment of distributions | 21,513 | - | 296,970 | - |
Shares redeemed | (41,921) | (11,190) | (631,291) | (189,267) |
Net increase (decrease) | 62,723 | 152,721 | $ 892,936 | $ 2,615,327 |
Class B | ||||
Shares sold | 29,629 | 74,357 | $ 421,198 | $ 1,273,355 |
Reinvestment of distributions | 9,315 | - | 128,955 | - |
Shares redeemed | (22,360) | (460) | (318,657) | (7,526) |
Net increase (decrease) | 16,584 | 73,897 | $ 231,496 | $ 1,265,829 |
Class C | ||||
Shares sold | 106,703 | 188,521 | $ 1,525,121 | $ 3,213,374 |
Reinvestment of distributions | 24,057 | - | 331,349 | - |
Shares redeemed | (42,564) | (20,772) | (588,126) | (352,540) |
Net increase (decrease) | 88,196 | 167,749 | $ 1,268,344 | $ 2,860,834 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended January 31, 2008 | Year ended | Six months ended January 31, 2008 | Year ended | |
International Real Estate | ||||
Shares sold | 12,790,704 | 78,643,461 | $ 187,159,553 | $1,288,512,778 |
Reinvestment of distributions | 7,157,456 | 4,249,998 | 99,352,814 | 65,004,744 |
Shares redeemed | (27,029,865) | (47,753,325) | (391,367,437) | (797,297,400) |
Net increase (decrease) | (7,081,705) | 35,140,134 | $ (104,855,070) | $ 556,220,122 |
Institutional Class | ||||
Shares sold | 132,564 | 158,866 | $ 1,975,421 | $ 2,704,482 |
Reinvestment of distributions | 22,489 | - | 308,363 | - |
Shares redeemed | (74,704) | (1,378) | (1,015,703) | (22,809) |
Net increase (decrease) | 80,349 | 157,488 | $ 1,268,081 | $ 2,681,673 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Research & Analysis Company
Fidelity Management & Research
(U.K.) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisers
Fidelity International Investment
Advisers (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Mellon Bank, N.A.
Pittsburgh, PA
AIREI-USAN-0308
1.843174.100
(Fidelity Investment logo)(registered trademark)
Fidelity®
Leveraged Company Stock
Fund
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the last six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a share-holder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 922.00 | $ 4.01 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.96 | $ 4.22 |
* Expenses are equal to the Fund's annualized expense ratio of .83%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Exterran Holdings, Inc. | 4.1 | 0.0 |
Forest Oil Corp. | 3.2 | 2.1 |
Freeport-McMoRan Copper & Gold, Inc. Class B | 2.9 | 5.1 |
Service Corp. International | 2.8 | 2.5 |
Range Resources Corp. | 2.7 | 1.6 |
Chesapeake Energy Corp. | 2.6 | 2.0 |
Celanese Corp. Class A | 2.6 | 1.9 |
El Paso Corp. | 2.4 | 2.0 |
Teekay Corp. | 2.3 | 2.4 |
Flextronics International Ltd. | 2.3 | 1.7 |
27.9 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Energy | 41.1 | 33.5 |
Industrials | 13.9 | 15.3 |
Materials | 12.1 | 13.7 |
Information Technology | 12.0 | 16.1 |
Consumer Discretionary | 6.6 | 7.8 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 97.8% | ![]() | Stocks 96.3% | ||||
![]() | Bonds 0.2% | ![]() | Bonds 0.2% | ||||
![]() | Convertible | ![]() | Convertible | ||||
![]() | Other Investments 0.1% | ![]() | Other Investments 0.1% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 13.5% | ** Foreign investments | 14.7% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.8% | ||||
Shares | Value (000s) | |||
CONSUMER DISCRETIONARY - 6.4% | ||||
Auto Components - 0.3% | ||||
IdleAire Technologies Corp. warrants 12/15/15 (a)(g) | 24,470 | $ 24 | ||
The Goodyear Tire & Rubber Co. (a) | 564,063 | 14,197 | ||
WABCO Holdings, Inc. | 211,533 | 8,523 | ||
22,744 | ||||
Automobiles - 0.1% | ||||
Ford Motor Co. (a) | 1,420,000 | 9,429 | ||
Diversified Consumer Services - 3.3% | ||||
Carriage Services, Inc. Class A (a) | 266,200 | 2,151 | ||
Regis Corp. | 319,946 | 8,104 | ||
Service Corp. International (e)(f) | 15,606,400 | 187,745 | ||
Stewart Enterprises, Inc. Class A | 2,979,752 | 21,216 | ||
219,216 | ||||
Hotels, Restaurants & Leisure - 0.8% | ||||
Bally Technologies, Inc. (a) | 952,360 | 45,370 | ||
Six Flags, Inc. (a) | 3,295,400 | 6,426 | ||
The Steak n Shake Co. (a)(e) | 659,400 | 5,763 | ||
57,559 | ||||
Household Durables - 0.3% | ||||
Lennar Corp. Class A (e) | 983,400 | 20,258 | ||
Leisure Equipment & Products - 0.3% | ||||
Callaway Golf Co. | 970,287 | 17,388 | ||
Media - 1.0% | ||||
Charter Communications, Inc. Class A (a)(e) | 12,399,171 | 14,507 | ||
Cinemark Holdings, Inc. (e) | 1,554,497 | 22,229 | ||
Comcast Corp. Class A (a) | 315,700 | 5,733 | ||
Gray Television, Inc. | 1,995,535 | 15,126 | ||
Knology, Inc. (a) | 113,144 | 1,284 | ||
Nexstar Broadcasting Group, Inc. Class A (a) | 1,040,500 | 7,908 | ||
66,787 | ||||
Specialty Retail - 0.3% | ||||
Gamestop Corp. Class A (a) | 152,000 | 7,863 | ||
The Pep Boys - Manny, Moe & Jack (e) | 1,185,692 | 12,960 | ||
20,823 | ||||
TOTAL CONSUMER DISCRETIONARY | 434,204 | |||
CONSUMER STAPLES - 3.2% | ||||
Food & Staples Retailing - 1.3% | ||||
Koninklijke Ahold NV sponsored ADR | 2,484,960 | 32,429 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
CONSUMER STAPLES - continued | ||||
Food & Staples Retailing - continued | ||||
Kroger Co. | 339,300 | $ 8,635 | ||
SUPERVALU, Inc. | 1,647,217 | 49,515 | ||
90,579 | ||||
Food Products - 1.8% | ||||
Corn Products International, Inc. | 994,019 | 33,598 | ||
Darling International, Inc. (a) | 1,844,966 | 21,402 | ||
Dean Foods Co. | 989,600 | 27,709 | ||
Smithfield Foods, Inc. (a)(e) | 1,333,476 | 37,137 | ||
119,846 | ||||
Personal Products - 0.1% | ||||
Revlon, Inc. Class A (sub. vtg.) (a) | 3,694,361 | 3,953 | ||
TOTAL CONSUMER STAPLES | 214,378 | |||
ENERGY - 40.7% | ||||
Energy Equipment & Services - 9.7% | ||||
Basic Energy Services, Inc. (a) | 249,300 | 4,460 | ||
Exterran Holdings, Inc. (a)(e)(f) | 4,225,927 | 275,698 | ||
Grant Prideco, Inc. (a) | 2,243,420 | 111,677 | ||
Grey Wolf, Inc. (a) | 8,326,600 | 49,627 | ||
Hercules Offshore, Inc. (a)(e) | 1,072,822 | 24,729 | ||
Nabors Industries Ltd. (a) | 808,800 | 22,016 | ||
Noble Corp. | 696,000 | 30,464 | ||
Oil States International, Inc. (a) | 270,700 | 9,491 | ||
Parker Drilling Co. (a) | 1,200,000 | 8,340 | ||
Petroleum Geo-Services ASA | 1,049,100 | 22,545 | ||
Petroleum Geo-Services ASA sponsored ADR | 2,244,777 | 48,240 | ||
Pride International, Inc. (a) | 646,100 | 20,488 | ||
Rowan Companies, Inc. | 321,100 | 10,930 | ||
Schoeller-Bleckmann Oilfield Equipment AG | 200,000 | 15,212 | ||
653,917 | ||||
Oil, Gas & Consumable Fuels - 31.0% | ||||
Alpha Natural Resources, Inc. (a)(e)(f) | 3,603,434 | 120,571 | ||
Anadarko Petroleum Corp. | 340,948 | 19,976 | ||
Arch Coal, Inc. | 688,255 | 30,283 | ||
Cabot Oil & Gas Corp. | 787,400 | 30,465 | ||
Chesapeake Energy Corp. (e) | 4,710,100 | 175,357 | ||
ConocoPhillips | 414,631 | 33,303 | ||
Double Hull Tankers, Inc. (f) | 2,298,600 | 25,767 | ||
El Paso Corp. | 9,622,112 | 158,572 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
ENERGY - continued | ||||
Oil, Gas & Consumable Fuels - continued | ||||
EOG Resources, Inc. | 368,700 | $ 32,261 | ||
Forest Oil Corp. (a)(f) | 4,814,100 | 217,694 | ||
Frontier Oil Corp. | 1,583,600 | 55,854 | ||
General Maritime Corp. (f) | 2,849,200 | 70,774 | ||
Mariner Energy, Inc. (a) | 2,921,653 | 73,217 | ||
Massey Energy Co. | 2,357,500 | 87,652 | ||
Nexen, Inc. | 1,063,200 | 30,448 | ||
OPTI Canada, Inc. (a) | 1,311,300 | 21,625 | ||
Overseas Shipholding Group, Inc. (f) | 2,008,500 | 130,994 | ||
Paladin Energy Ltd. (a)(e) | 2,042,400 | 8,113 | ||
Patriot Coal Corp. (a) | 145,181 | 5,771 | ||
Peabody Energy Corp. | 2,451,813 | 132,447 | ||
Petrohawk Energy Corp. (a) | 2,792,748 | 43,986 | ||
Plains Exploration & Production Co. (a) | 360,660 | 17,543 | ||
Range Resources Corp. | 3,489,300 | 182,211 | ||
Ship Finance International Ltd.: | ||||
(Norway) | 53,099 | 1,178 | ||
(NY Shares) | 1,275,051 | 33,304 | ||
Stone Energy Corp. (a) | 557,646 | 22,863 | ||
Teekay Corp. | 3,343,200 | 158,133 | ||
Teekay Tankers Ltd. | 64,100 | 1,218 | ||
Valero Energy Corp. | 1,387,400 | 82,120 | ||
Williams Companies, Inc. | 1,784,400 | 57,047 | ||
XTO Energy, Inc. | 571,245 | 29,670 | ||
2,090,417 | ||||
TOTAL ENERGY | 2,744,334 | |||
FINANCIALS - 0.9% | ||||
Capital Markets - 0.6% | ||||
Legg Mason, Inc. | 553,200 | 39,830 | ||
Commercial Banks - 0.1% | ||||
PNC Financial Services Group, Inc. | 157,200 | 10,315 | ||
Real Estate Management & Development - 0.2% | ||||
CB Richard Ellis Group, Inc. Class A (a) | 553,200 | 10,738 | ||
TOTAL FINANCIALS | 60,883 | |||
HEALTH CARE - 4.4% | ||||
Biotechnology - 0.0% | ||||
Lexicon Pharmaceuticals, Inc. (a) | 392,187 | 929 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
HEALTH CARE - continued | ||||
Health Care Equipment & Supplies - 1.0% | ||||
Baxter International, Inc. | 430,100 | $ 26,124 | ||
Beckman Coulter, Inc. | 354,200 | 23,554 | ||
Hospira, Inc. (a) | 361,900 | 14,878 | ||
TomoTherapy, Inc. | 302,420 | 4,479 | ||
69,035 | ||||
Health Care Providers & Services - 3.3% | ||||
Community Health Systems, Inc. (a) | 568,782 | 18,258 | ||
DaVita, Inc. (a) | 1,942,600 | 103,638 | ||
Rural/Metro Corp. (a) | 834,200 | 2,377 | ||
Tenet Healthcare Corp. (a) | 22,255,183 | 98,590 | ||
222,863 | ||||
Pharmaceuticals - 0.1% | ||||
Salix Pharmaceuticals Ltd. (a)(e) | 632,610 | 4,397 | ||
TOTAL HEALTH CARE | 297,224 | |||
INDUSTRIALS - 13.8% | ||||
Aerospace & Defense - 1.3% | ||||
American Science & Engineering, Inc. (e) | 314,591 | 16,724 | ||
Teledyne Technologies, Inc. (a) | 368,594 | 19,031 | ||
United Technologies Corp. | 732,550 | 53,776 | ||
89,531 | ||||
Air Freight & Logistics - 0.1% | ||||
Park-Ohio Holdings Corp. (a) | 179,465 | 4,013 | ||
Airlines - 1.0% | ||||
AirTran Holdings, Inc. (a)(e) | 861,500 | 7,435 | ||
AMR Corp. (a) | 670,630 | 9,349 | ||
Delta Air Lines, Inc. (a)(e) | 2,112,876 | 35,560 | ||
Northwest Airlines Corp. (a) | 205,972 | 3,854 | ||
UAL Corp. | 280,400 | 10,641 | ||
66,839 | ||||
Building Products - 2.1% | ||||
Armstrong World Industries, Inc. (a) | 120,989 | 4,442 | ||
Goodman Global, Inc. (a) | 426,400 | 10,707 | ||
Lennox International, Inc. | 130,700 | 4,857 | ||
Owens Corning (a)(e) | 4,295,649 | 93,387 | ||
Owens Corning warrants 10/31/13 (a) | 406,600 | 915 | ||
Trane, Inc. | 634,600 | 28,417 | ||
142,725 | ||||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
INDUSTRIALS - continued | ||||
Commercial Services & Supplies - 3.1% | ||||
Allied Waste Industries, Inc. (a) | 5,612,500 | $ 55,283 | ||
Cenveo, Inc. (a)(e)(f) | 3,858,300 | 59,958 | ||
Deluxe Corp. | 355,000 | 8,634 | ||
Layne Christensen Co. (a) | 72,376 | 2,671 | ||
Republic Services, Inc. | 744,750 | 22,343 | ||
The Brink's Co. | 244,500 | 14,824 | ||
Waste Management, Inc. | 1,494,300 | 48,475 | ||
212,188 | ||||
Construction & Engineering - 0.5% | ||||
Foster Wheeler Ltd. (a) | 427,400 | 29,264 | ||
Great Lakes Dredge & Dock Corp. | 429,400 | 2,718 | ||
31,982 | ||||
Electrical Equipment - 1.5% | ||||
Baldor Electric Co. (e) | 404,900 | 12,260 | ||
Belden, Inc. | 1,153,266 | 48,783 | ||
Emerson Electric Co. | 389,900 | 19,823 | ||
General Cable Corp. (a)(e) | 197,700 | 11,469 | ||
Superior Essex, Inc. (a) | 321,722 | 7,737 | ||
100,072 | ||||
Machinery - 1.5% | ||||
Accuride Corp. (a) | 1,384,197 | 8,679 | ||
Badger Meter, Inc. (e) | 366,854 | 13,867 | ||
Cummins, Inc. | 824,000 | 39,783 | ||
Eaton Corp. | 278,800 | 23,073 | ||
FreightCar America, Inc. | 151,247 | 5,704 | ||
Lindsay Corp. (e) | 19,000 | 1,159 | ||
Middleby Corp. (a) | 87,233 | 5,200 | ||
Thermadyne Holdings Corp. (a) | 64,900 | 650 | ||
Timken Co. | 92,800 | 2,805 | ||
100,920 | ||||
Marine - 2.1% | ||||
Excel Maritime Carriers Ltd. | 122,900 | 4,678 | ||
Genco Shipping & Trading Ltd. | 1,096,400 | 54,074 | ||
Navios Maritime Holdings, Inc. (f) | 5,740,486 | 66,245 | ||
OceanFreight, Inc. (f) | 740,600 | 14,449 | ||
139,446 | ||||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
INDUSTRIALS - continued | ||||
Trading Companies & Distributors - 0.5% | ||||
H&E Equipment Services, Inc. (a) | 12,900 | $ 214 | ||
UAP Holding Corp. | 846,600 | 32,459 | ||
32,673 | ||||
Transportation Infrastructure - 0.1% | ||||
Aegean Marine Petroleum Network, Inc. | 215,300 | 7,038 | ||
TOTAL INDUSTRIALS | 927,427 | |||
INFORMATION TECHNOLOGY - 12.0% | ||||
Computers & Peripherals - 1.2% | ||||
EMC Corp. (a) | 2,701,700 | 42,876 | ||
Seagate Technology | 1,230,800 | 24,948 | ||
Sun Microsystems, Inc. (a) | 981,875 | 17,183 | ||
85,007 | ||||
Electronic Equipment & Instruments - 3.6% | ||||
Bell Microproducts, Inc. (a) | 623,761 | 3,281 | ||
Cogent, Inc. (a)(e) | 1,966,117 | 19,386 | ||
DDi Corp. (a) | 295,899 | 1,225 | ||
Flextronics International Ltd. (a) | 13,177,863 | 154,181 | ||
Itron, Inc. (a) | 200,800 | 16,546 | ||
Merix Corp. (a)(f) | 1,545,123 | 4,141 | ||
TTM Technologies, Inc. (a) | 852,523 | 8,670 | ||
Tyco Electronics Ltd. | 631,050 | 21,336 | ||
Viasystems Group, Inc. (a) | 775,300 | 6,978 | ||
Viasystems Group, Inc. (i) | 625,780 | 5,632 | ||
241,376 | ||||
Internet Software & Services - 0.1% | ||||
VeriSign, Inc. (a) | 194,300 | 6,591 | ||
IT Services - 0.6% | ||||
CACI International, Inc. Class A (a) | 348,000 | 15,169 | ||
Cognizant Technology Solutions Corp. Class A (a) | 56,200 | 1,568 | ||
SAIC, Inc. (a)(e) | 1,381,400 | 26,108 | ||
42,845 | ||||
Semiconductors & Semiconductor Equipment - 5.9% | ||||
Advanced Micro Devices, Inc. (a)(e) | 8,842,500 | 67,557 | ||
AMIS Holdings, Inc. (a)(f) | 4,524,524 | 33,074 | ||
Amkor Technology, Inc. (a)(e)(f) | 12,599,836 | 96,263 | ||
Atmel Corp. (a) | 5,381,223 | 17,005 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
INFORMATION TECHNOLOGY - continued | ||||
Semiconductors & Semiconductor Equipment - continued | ||||
Cypress Semiconductor Corp. (a) | 651,200 | $ 13,838 | ||
Fairchild Semiconductor International, Inc. (a) | 200,000 | 2,450 | ||
Infineon Technologies AG sponsored ADR (a) | 1,211,200 | 12,403 | ||
Intel Corp. | 693,100 | 14,694 | ||
ON Semiconductor Corp. (a)(e)(f) | 17,876,600 | 115,840 | ||
Skyworks Solutions, Inc. (a) | 1,112,647 | 8,957 | ||
Spansion, Inc. Class A (a) | 3,345,100 | 12,778 | ||
394,859 | ||||
Software - 0.6% | ||||
Symantec Corp. (a)(e) | 2,149,400 | 38,539 | ||
TOTAL INFORMATION TECHNOLOGY | 809,217 | |||
MATERIALS - 12.1% | ||||
Chemicals - 6.0% | ||||
Agrium, Inc. | 344,200 | 22,205 | ||
Albemarle Corp. | 1,477,906 | 53,589 | ||
Arch Chemicals, Inc. | 648,542 | 21,836 | ||
Celanese Corp. Class A | 4,683,100 | 174,118 | ||
Georgia Gulf Corp. (e) | 609,840 | 4,757 | ||
H.B. Fuller Co. | 2,983,010 | 61,927 | ||
Monsanto Co. | 469,600 | 52,802 | ||
Nalco Holding Co. | 128,300 | 2,687 | ||
Phosphate Holdings, Inc. (a)(i) | 307,500 | 9,763 | ||
Pliant Corp. (a) | 567 | 0 | ||
Texas Petrochemicals, Inc. (a) | 11,700 | 281 | ||
403,965 | ||||
Containers & Packaging - 1.3% | ||||
Owens-Illinois, Inc. (a) | 842,625 | 42,468 | ||
Smurfit-Stone Container Corp. (a)(e) | 3,726,482 | 35,364 | ||
Temple-Inland, Inc. | 365,400 | 6,851 | ||
84,683 | ||||
Metals & Mining - 3.0% | ||||
Freeport-McMoRan Copper & Gold, Inc. Class B | 2,217,182 | 197,396 | ||
Ormet Corp. (a) | 330,000 | 1,172 | ||
Ormet Corp. (a)(i) | 1,075,000 | 3,435 | ||
202,003 | ||||
Paper & Forest Products - 1.8% | ||||
AbitibiBowater, Inc. (e) | 606,788 | 15,030 | ||
Common Stocks - continued | ||||
Shares | Value (000s) | |||
MATERIALS - continued | ||||
Paper & Forest Products - continued | ||||
Domtar Corp. (a) | 2,059,700 | $ 16,622 | ||
International Paper Co. (e) | 896,100 | 28,899 | ||
Neenah Paper, Inc. | 518,300 | 14,046 | ||
Weyerhaeuser Co. | 694,300 | 47,018 | ||
121,615 | ||||
TOTAL MATERIALS | 812,266 | |||
TELECOMMUNICATION SERVICES - 1.1% | ||||
Diversified Telecommunication Services - 0.6% | ||||
McLeodUSA, Inc. (a) | 1,701,867 | 17,884 | ||
Qwest Communications International, Inc. (e) | 3,203,500 | 18,837 | ||
XO Holdings, Inc. (a) | 766,500 | 1,487 | ||
38,208 | ||||
Wireless Telecommunication Services - 0.5% | ||||
Centennial Communications Corp. Class A (a) | 827,032 | 4,731 | ||
Syniverse Holdings, Inc. (a) | 1,923,000 | 30,364 | ||
35,095 | ||||
TOTAL TELECOMMUNICATION SERVICES | 73,303 | |||
UTILITIES - 3.2% | ||||
Gas Utilities - 0.2% | ||||
ONEOK, Inc. | 317,600 | 14,927 | ||
Independent Power Producers & Energy Traders - 1.9% | ||||
AES Corp. (a) | 4,622,740 | 88,202 | ||
Dynegy, Inc. Class A (a) | 1,987,000 | 13,949 | ||
Mirant Corp. (a) | 714,500 | 26,322 | ||
128,473 | ||||
Multi-Utilities - 1.1% | ||||
CMS Energy Corp. | 4,552,600 | 71,339 | ||
TOTAL UTILITIES | 214,739 | |||
TOTAL COMMON STOCKS (Cost $5,527,994) | 6,587,975 | |||
Preferred Stocks - 0.4% | ||||
Shares | Value (000s) | |||
Convertible Preferred Stocks - 0.4% | ||||
ENERGY - 0.4% | ||||
Oil, Gas & Consumable Fuels - 0.4% | ||||
EXCO Resources, Inc. Series A1: | ||||
7.00% (i) | 2,173 | 24,594 | ||
Nonconvertible Preferred Stocks - 0.0% | ||||
MATERIALS - 0.0% | ||||
Chemicals - 0.0% | ||||
Pliant Corp. Series AA 13.00% | 5,008 | 501 | ||
TOTAL PREFERRED STOCKS (Cost $29,411) | 25,095 | |||
Corporate Bonds - 0.4% | ||||
Principal Amount (000s) | ||||
Convertible Bonds - 0.2% | ||||
TELECOMMUNICATION SERVICES - 0.2% | ||||
Wireless Telecommunication Services - 0.2% | ||||
ICO North America, Inc. 7.5% 8/15/09 (i) | $ 15,495 | 14,720 | ||
Nonconvertible Bonds - 0.2% | ||||
CONSUMER DISCRETIONARY - 0.2% | ||||
Auto Components - 0.2% | ||||
IdleAire Technologies Corp. 0% 12/15/12 (d) | 24,470 | 12,235 | ||
INDUSTRIALS - 0.0% | ||||
Airlines - 0.0% | ||||
Delta Air Lines, Inc. 8% 12/15/07 (a)(g) | 4,145 | 207 | ||
Northwest Airlines, Inc. 9.875% 3/15/07 (a) | 7,000 | 210 | ||
417 | ||||
TOTAL NONCONVERTIBLE BONDS | 12,652 | |||
TOTAL CORPORATE BONDS (Cost $39,187) | 27,372 | |||
Money Market Funds - 6.7% | ||||
Shares | Value (000s) | |||
Fidelity Cash Central Fund, 3.79% (b) | 102,881,674 | $ 102,882 | ||
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 345,584,067 | 345,584 | ||
TOTAL MONEY MARKET FUNDS (Cost $448,466) | 448,466 | |||
Cash Equivalents - 0.0% | ||||
Maturity Amount (000s) | ||||
Investments in repurchase agreements in a joint trading account at 1.69%, dated 1/31/08 due 2/1/08 (Collateralized by U.S. Treasury Obligations) # | 3,340 | 3,340 | ||
Other - 0.1% | ||||
Shares | ||||
Other - 0.1% | ||||
Delta Air Lines ALPA Claim (a) | 64,750,000 | 3,561 | ||
TOTAL INVESTMENT PORTFOLIO - 105.4% (Cost $6,049,208) | 7,095,809 | |||
NET OTHER ASSETS - (5.4)% | (363,114) | |||
NET ASSETS - 100% | $ 6,732,695 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end. |
(e) Security or a portion of the security is on loan at period end. |
(f) Affiliated company. |
(g) 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 $231,000 or 0.0% of net assets. |
(h) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(i) 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 $58,144,000 or 0.9% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
EXCO Resources, Inc. Series A1, 7.00% | 3/28/07 | $ 27,000 |
ICO North America, Inc. 7.5% 8/15/09 | 8/12/05 - 2/14/07 | $ 15,649 |
Ormet Corp. | 2/27/07 - 4/4/07 | $ 20,556 |
Phosphate Holdings, Inc. | 1/25/08 | $ 9,994 |
Viasystems Group, Inc. | 2/13/04 | $ 12,594 |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$3,340,000 due 2/01/08 at 1.69% | |
Banc of America Securities LLC | $ 729 |
Barclays Capital, Inc. | 1,052 |
ING Financial Markets LLC | 1,559 |
$ 3,340 |
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 | $ 2,662 |
Fidelity Securities Lending Cash Central Fund | 2,134 |
Total | $ 4,796 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
Alpha Natural Resources, Inc. | $ 68,371 | $ - | $ 7,127 | $ - | $ 120,571 |
AMIS Holdings, Inc. | 46,648 | - | - | - | 33,074 |
Amkor Technology, Inc. | 155,734 | - | - | - | 96,263 |
Cenveo, Inc. | 80,855 | 202 | - | - | 59,958 |
Double Hull Tankers, Inc. | 40,938 | - | - | 1,747 | 25,767 |
Exterran Holdings, Inc. | - | 53,633 | - | - | 275,698 |
Forest Oil Corp. | 160,969 | 34,970 | - | - | 217,694 |
Friendly Ice Cream Corp. | 6,478 | - | 6,563 | - | - |
General Maritime Corp. | 84,479 | - | 10,605 | 3,149 | 70,774 |
Interstate Bakeries Corp. | 5,678 | - | 139 | - | - |
Merix Corp. | 11,635 | - | - | - | 4,141 |
Navios Maritime Holdings, Inc. | 73,496 | 1,727 | - | 757 | 66,245 |
OceanFreight, Inc. | 17,693 | - | - | 668 | 14,449 |
ON Semiconductor Corp. | 211,301 | - | - | - | 115,840 |
Overseas Shipholding Group, Inc. | 140,663 | 13,883 | - | 1,194 | 130,994 |
Service Corp. International | 192,786 | - | 4,257 | 1,101 | 187,745 |
The Bon-Ton Stores, Inc. | - | 15,705 | 5,208 | 37 | - |
Universal Compression Holdings, Inc. | 148,600 | - | - | - | - |
Total | $ 1,446,324 | $ 120,120 | $ 33,899 | $ 8,653 | $ 1,419,213 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 86.5% |
Marshall Islands | 5.9% |
Singapore | 2.3% |
Bermuda | 1.2% |
Canada | 1.1% |
Norway | 1.0% |
Others (individually less than 1%) | 2.0% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2008 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $337,932 and repurchase agreements of $3,340) - See accompanying schedule: Unaffiliated issuers (cost $4,496,832) | $ 5,228,130 | |
Fidelity Central Funds (cost $448,466) | 448,466 | |
Other affiliated issuers (cost $1,103,910) | 1,419,213 | |
Total Investments (cost $6,049,208) | $ 7,095,809 | |
Receivable for investments sold | 14,730 | |
Receivable for fund shares sold | 11,746 | |
Dividends receivable | 2,607 | |
Interest receivable | 533 | |
Distributions receivable from Fidelity Central Funds | 591 | |
Prepaid expenses | 23 | |
Other receivables | 19 | |
Total assets | 7,126,058 | |
Liabilities | ||
Payable for investments purchased | $ 25,883 | |
Payable for fund shares redeemed | 16,877 | |
Accrued management fee | 3,482 | |
Other affiliated payables | 1,313 | |
Other payables and accrued expenses | 224 | |
Collateral on securities loaned, at value | 345,584 | |
Total liabilities | 393,363 | |
Net Assets | $ 6,732,695 | |
Net Assets consist of: | ||
Paid in capital | $ 5,630,407 | |
Distributions in excess of net investment income | (305) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 55,992 | |
Net unrealized appreciation (depreciation) on investments | 1,046,601 | |
Net Assets, for 228,375 shares outstanding | $ 6,732,695 | |
Net Asset Value, offering price and redemption price per share ($6,732,695 ÷ 228,375 shares) | $ 29.48 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended January 31, 2008 (Unaudited) | |
Investment Income | ||
Dividends (including $8,653 earned from other affiliated issuers) | $ 45,383 | |
Interest | 2,332 | |
Income from Fidelity Central Funds | 4,796 | |
Total income | 52,511 | |
Expenses | ||
Management fee | $ 23,085 | |
Transfer agent fees | 7,352 | |
Accounting and security lending fees | 645 | |
Custodian fees and expenses | 57 | |
Independent trustees' compensation | 16 | |
Registration fees | 121 | |
Audit | 39 | |
Legal | 21 | |
Interest | 2 | |
Miscellaneous | 228 | |
Total expenses before reductions | 31,566 | |
Expense reductions | (106) | 31,460 |
Net investment income (loss) | 21,051 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 149,684 | |
Other affiliated issuers | (21,209) | |
Foreign currency transactions | 67 | |
Total net realized gain (loss) | 128,542 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (770,694) | |
Assets and liabilities in foreign currencies | (15) | |
Total change in net unrealized appreciation (depreciation) | (770,709) | |
Net gain (loss) | (642,167) | |
Net increase (decrease) in net assets resulting from operations | $ (621,116) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2008 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 21,051 | $ 80,309 |
Net realized gain (loss) | 128,542 | 319,520 |
Change in net unrealized appreciation (depreciation) | (770,709) | 841,301 |
Net increase (decrease) in net assets resulting | (621,116) | 1,241,130 |
Distributions to shareholders from net investment income | (89,830) | (19,040) |
Distributions to shareholders from net realized gain | (319,818) | (219,421) |
Total distributions | (409,648) | (238,461) |
Share transactions | 1,450,237 | 3,685,329 |
Reinvestment of distributions | 391,352 | 228,498 |
Cost of shares redeemed | (1,910,472) | (1,261,801) |
Net increase (decrease) in net assets resulting from share transactions | (68,883) | 2,652,026 |
Redemption fees | 2,243 | 1,519 |
Total increase (decrease) in net assets | (1,097,404) | 3,656,214 |
Net Assets | ||
Beginning of period | 7,830,099 | 4,173,885 |
End of period (including distributions in excess of net investment income of $305 and undistributed net investment income of $73,047, respectively) | $ 6,732,695 | $ 7,830,099 |
Other Information Shares | ||
Sold | 44,711 | 116,056 |
Issued in reinvestment of distributions | 12,304 | 8,328 |
Redeemed | (60,452) | (41,247) |
Net increase (decrease) | (3,437) | 83,137 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Leveraged Company Stock Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions and market discount.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 1,657,648 |
Unrealized depreciation | (612,842) |
Net unrealized appreciation (depreciation) | $ 1,044,806 |
Cost for federal income tax purposes | $ 6,051,003 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Operating Policies - continued
Restricted Securities - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $967,122 and $1,281,425, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .35% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .61% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .19% of average net assets. Prior to Janaury 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR, was the Fund's transfer agent.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $38 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Interfund Lending Program - continued
alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding.
The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest |
Borrower | $ 14,993 | 3.69% | $ 2 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $10 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $2,134.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $10 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $31 and $65, respectively.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $80.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
Fidelity Research & Analysis Company
Fidelity Management & Research
(U.K.) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST ®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
LSF-USAN-0308
1.789286.105
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
Fidelity®
OTC
Portfolio
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 955.60 | $ 5.06 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,019.96 | $ 5.23 |
* Expenses are equal to the Fund's annualized expense ratio of 1.03%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Nintendo Co. Ltd. | 10.1 | 9.7 |
Google, Inc. Class A (sub. vtg.) | 9.4 | 7.7 |
Microsoft Corp. | 6.9 | 1.8 |
Cisco Systems, Inc. | 5.1 | 3.4 |
Research In Motion Ltd. | 3.5 | 2.9 |
Apple, Inc. | 2.1 | 4.3 |
Celgene Corp. | 2.0 | 2.3 |
Biogen Idec, Inc. | 1.9 | 1.6 |
Gilead Sciences, Inc. | 1.7 | 1.3 |
Activision , Inc. | 1.6 | 0.4 |
44.3 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Information Technology | 57.3 | 68.0 |
Health Care | 19.3 | 13.2 |
Industrials | 7.8 | 2.9 |
Consumer Discretionary | 6.7 | 8.3 |
Financials | 4.0 | 3.1 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 98.8% | ![]() | Stocks 99.6% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 22.1% | * * Foreign investments | 19.0% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.8% | |||
Shares | Value (000s) | ||
CONSUMER DISCRETIONARY - 6.7% | |||
Diversified Consumer Services - 0.3% | |||
New Oriental Education & Technology Group, Inc. sponsored ADR (a) | 358,900 | $ 20,332 | |
Hotels, Restaurants & Leisure - 1.1% | |||
BJ's Restaurants, Inc. (a) | 194,800 | 3,362 | |
California Pizza Kitchen, Inc. (a) | 298,100 | 4,003 | |
Morgans Hotel Group Co. (a) | 1,329,300 | 19,368 | |
P.F. Chang's China Bistro, Inc. (a) | 133,400 | 3,794 | |
Red Robin Gourmet Burgers, Inc. (a) | 358,000 | 12,487 | |
Starbucks Corp. (a) | 1,689,700 | 31,952 | |
Texas Roadhouse, Inc. Class A (a) | 646,500 | 7,803 | |
82,769 | |||
Internet & Catalog Retail - 0.9% | |||
Amazon.com, Inc. (a)(d) | 898,600 | 69,821 | |
Media - 0.5% | |||
Pyramid Saimira Theatre Ltd. | 532,953 | 5,471 | |
TiVo, Inc. (a)(d) | 3,854,075 | 33,800 | |
39,271 | |||
Specialty Retail - 0.6% | |||
Jo-Ann Stores, Inc. (a) | 664,818 | 8,423 | |
Jos. A. Bank Clothiers, Inc. (a) | 200,000 | 5,448 | |
Staples, Inc. | 1,039,700 | 24,890 | |
The Game Group PLC | 962,100 | 3,834 | |
42,595 | |||
Textiles, Apparel & Luxury Goods - 3.3% | |||
Crocs, Inc. (a)(d) | 1,497,200 | 52,088 | |
Deckers Outdoor Corp. (a)(d)(e) | 736,500 | 89,293 | |
Fuqi International, Inc. (a) | 992,517 | 8,456 | |
Lululemon Athletica, Inc. (d) | 810,100 | 27,454 | |
Provogue (India) Ltd. | 405,999 | 13,243 | |
Provogue (India) Ltd. (a)(f) | 700,000 | 20,549 | |
True Religion Apparel, Inc. (a)(d)(e) | 1,724,900 | 32,169 | |
243,252 | |||
TOTAL CONSUMER DISCRETIONARY | 498,040 | ||
CONSUMER STAPLES - 1.0% | |||
Food & Staples Retailing - 0.8% | |||
Costco Wholesale Corp. (d) | 209,600 | 14,240 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
CONSUMER STAPLES - continued | |||
Food & Staples Retailing - continued | |||
Whole Foods Market, Inc. (d) | 633,000 | $ 24,966 | |
Winn-Dixie Stores, Inc. (a)(d) | 1,152,500 | 20,422 | |
59,628 | |||
Food Products - 0.2% | |||
Green Mountain Coffee Roasters, Inc. (a) | 374,000 | 14,406 | |
TOTAL CONSUMER STAPLES | 74,034 | ||
ENERGY - 0.9% | |||
Energy Equipment & Services - 0.3% | |||
Global Industries Ltd. (a) | 633,400 | 11,186 | |
Patterson-UTI Energy, Inc. | 594,100 | 11,632 | |
22,818 | |||
Oil, Gas & Consumable Fuels - 0.6% | |||
Valero Energy Corp. | 773,000 | 45,754 | |
TOTAL ENERGY | 68,572 | ||
FINANCIALS - 4.0% | |||
Capital Markets - 3.2% | |||
Bear Stearns Companies, Inc. (d) | 230,500 | 20,814 | |
Charles Schwab Corp. | 2,659,500 | 59,307 | |
FCStone Group, Inc. | 146,100 | 6,480 | |
GFI Group, Inc. (a)(d) | 178,600 | 15,754 | |
Goldman Sachs Group, Inc. | 133,000 | 26,702 | |
Greenhill & Co., Inc. | 105,400 | 7,118 | |
Lehman Brothers Holdings, Inc. | 740,400 | 47,511 | |
Merrill Lynch & Co., Inc. | 415,300 | 23,423 | |
T. Rowe Price Group, Inc. | 583,800 | 29,534 | |
236,643 | |||
Commercial Banks - 0.1% | |||
MB Financial, Inc. | 28,545 | 888 | |
South Financial Group, Inc. | 219,800 | 3,798 | |
Texas Capital Bancshares, Inc. (a) | 126,500 | 2,205 | |
6,891 | |||
Diversified Financial Services - 0.3% | |||
Bolsa de Mercadorias & Futuros - BM&F SA | 334,300 | 3,012 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
FINANCIALS - continued | |||
Diversified Financial Services - continued | |||
Bovespa Holding SA | 155,000 | $ 2,276 | |
Hong Kong Exchanges & Clearing Ltd. | 1,007,000 | 20,766 | |
26,054 | |||
Insurance - 0.2% | |||
LandAmerica Financial Group, Inc. | 235,500 | 12,284 | |
Real Estate Investment Trusts - 0.0% | |||
SWA REIT Ltd. (a) | 154,800 | 115 | |
Real Estate Management & Development - 0.2% | |||
DLF Ltd. | 141,397 | 2,913 | |
Indiabulls Real Estate Ltd. (a) | 725,950 | 11,676 | |
14,589 | |||
TOTAL FINANCIALS | 296,576 | ||
HEALTH CARE - 19.3% | |||
Biotechnology - 11.7% | |||
Acadia Pharmaceuticals, Inc. (a) | 267,800 | 3,176 | |
Alexion Pharmaceuticals, Inc. (a) | 217,880 | 14,232 | |
Alkermes, Inc. (a) | 1,694,941 | 22,577 | |
Amgen, Inc. (a) | 1,317,100 | 61,364 | |
Amylin Pharmaceuticals, Inc. (a) | 2,068,400 | 61,328 | |
Biogen Idec, Inc. (a) | 2,320,900 | 141,459 | |
BioMarin Pharmaceutical, Inc. (a) | 553,400 | 20,509 | |
Celgene Corp. (a) | 2,568,992 | 144,146 | |
Cephalon, Inc. (a)(d) | 798,400 | 52,399 | |
Cepheid, Inc. (a) | 325,600 | 9,944 | |
Cougar Biotechnology, Inc. (a) | 968,145 | 28,952 | |
Genomic Health, Inc. (a) | 443,000 | 9,299 | |
Gilead Sciences, Inc. (a) | 2,778,500 | 126,950 | |
GTx, Inc. (a)(d) | 544,100 | 6,034 | |
Indevus Pharmaceuticals, Inc. (a)(e) | 3,872,438 | 24,667 | |
Isis Pharmaceuticals, Inc. (a) | 526,400 | 8,212 | |
Metabolix, Inc. (a) | 100,000 | 1,823 | |
Myriad Genetics, Inc. (a) | 249,100 | 10,714 | |
ONYX Pharmaceuticals, Inc. (a) | 582,200 | 27,672 | |
Pharmion Corp. (a) | 154,025 | 10,620 | |
Regeneron Pharmaceuticals, Inc. (a) | 1,258,100 | 25,514 | |
Rigel Pharmaceuticals, Inc. (a) | 644,100 | 17,732 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Biotechnology - continued | |||
Seattle Genetics, Inc. (a) | 941,903 | $ 8,628 | |
Transition Therapeutics, Inc. (a) | 650,633 | 7,132 | |
Vertex Pharmaceuticals, Inc. (a) | 911,988 | 18,568 | |
863,651 | |||
Health Care Equipment & Supplies - 1.3% | |||
Align Technology, Inc. (a) | 523,500 | 6,167 | |
Gen-Probe, Inc. (a) | 500,500 | 28,604 | |
Inverness Medical Innovations, Inc. (a) | 642,826 | 28,959 | |
Meridian Bioscience, Inc. | 298,600 | 9,379 | |
Orthofix International NV (a) | 73,300 | 4,008 | |
Zoll Medical Corp. (a) | 811,200 | 21,627 | |
98,744 | |||
Health Care Providers & Services - 1.5% | |||
Amedisys, Inc. (a) | 118,600 | 5,056 | |
athenahealth, Inc. (d) | 238,600 | 7,492 | |
Express Scripts, Inc. (a) | 1,332,700 | 89,944 | |
Henry Schein, Inc. (a) | 164,600 | 9,568 | |
112,060 | |||
Health Care Technology - 0.6% | |||
Cerner Corp. (a) | 341,700 | 17,905 | |
Eclipsys Corp. (a) | 500,000 | 12,870 | |
MedAssets, Inc. | 720,500 | 14,518 | |
45,293 | |||
Life Sciences Tools & Services - 2.1% | |||
Affymetrix, Inc. (a) | 787,341 | 15,794 | |
AMAG Pharmaceuticals, Inc. | 309,000 | 15,932 | |
Bruker BioSciences Corp. (a) | 888,100 | 9,103 | |
Exelixis, Inc. (a) | 1,668,288 | 12,212 | |
Illumina, Inc. (a)(d) | 1,039,046 | 66,187 | |
Illumina, Inc.: | |||
warrants 11/22/10 (a)(f) | 354,776 | 5,373 | |
warrants 1/19/11 (a)(f) | 452,917 | 6,886 | |
Invitrogen Corp. (a) | 213,100 | 18,256 | |
Sequenom, Inc. (a) | 350,000 | 2,902 | |
152,645 | |||
Pharmaceuticals - 2.1% | |||
Elan Corp. PLC sponsored ADR (a) | 2,322,400 | 59,012 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Sepracor, Inc. (a) | 2,398,900 | $ 67,745 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 527,600 | 24,291 | |
151,048 | |||
TOTAL HEALTH CARE | 1,423,441 | ||
INDUSTRIALS - 7.8% | |||
Aerospace & Defense - 0.3% | |||
Honeywell International, Inc. | 398,200 | 23,522 | |
Air Freight & Logistics - 0.4% | |||
C.H. Robinson Worldwide, Inc. | 178,300 | 9,903 | |
Expeditors International of Washington, Inc. | 362,500 | 17,143 | |
27,046 | |||
Airlines - 1.1% | |||
Northwest Airlines Corp. (a) | 1,149,700 | 21,511 | |
UAL Corp. | 1,562,600 | 59,301 | |
80,812 | |||
Commercial Services & Supplies - 0.2% | |||
First Advantage Corp. Class A (a) | 19,204 | 312 | |
GeoEye, Inc. (a) | 186,470 | 6,519 | |
Monster Worldwide, Inc. (a) | 253,800 | 7,068 | |
13,899 | |||
Construction & Engineering - 0.7% | |||
Great Lakes Dredge & Dock Corp. | 1,406,100 | 8,901 | |
Hindustan Construction Co. Ltd. | 1,695,093 | 7,820 | |
Jaiprakash Associates Ltd. | 1,040,000 | 9,592 | |
Larsen & Toubro Ltd. | 130,000 | 12,070 | |
URS Corp. (a) | 270,084 | 11,857 | |
50,240 | |||
Electrical Equipment - 2.8% | |||
Bharat Heavy Electricals Ltd. | 191,762 | 10,058 | |
Crompton Greaves Ltd. | 1,010,000 | 8,399 | |
First Solar, Inc. (a) | 218,200 | 39,662 | |
JA Solar Holdings Co. Ltd. ADR | 1,348,200 | 68,529 | |
Renewable Energy Corp. AS (a) | 552,800 | 14,452 | |
Sunpower Corp. Class A (a)(d) | 642,400 | 44,383 | |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 66,200 | 3,623 | |
Yingli Green Energy Holding Co. Ltd. ADR (d) | 780,700 | 15,872 | |
204,978 | |||
Common Stocks - continued | |||
Shares | Value (000s) | ||
INDUSTRIALS - continued | |||
Industrial Conglomerates - 0.1% | |||
Siemens India Ltd. | 170,000 | $ 7,237 | |
Machinery - 1.0% | |||
Bucyrus International, Inc. Class A | 162,000 | 15,019 | |
Joy Global, Inc. | 598,100 | 37,710 | |
Titan Machinery, Inc. | 354,900 | 5,849 | |
TurboChef Technologies, Inc. (a)(d) | 1,448,094 | 14,843 | |
73,421 | |||
Road & Rail - 1.1% | |||
Avis Budget Group, Inc. (a) | 1,047,400 | 13,983 | |
J.B. Hunt Transport Services, Inc. (d) | 1,526,400 | 47,471 | |
Landstar System, Inc. | 494,200 | 24,725 | |
86,179 | |||
Trading Companies & Distributors - 0.1% | |||
Fastenal Co. (d) | 224,300 | 9,064 | |
TOTAL INDUSTRIALS | 576,398 | ||
INFORMATION TECHNOLOGY - 57.3% | |||
Communications Equipment - 11.8% | |||
Cisco Systems, Inc. (a) | 15,228,400 | 373,096 | |
Infinera Corp. | 865,142 | 8,816 | |
Juniper Networks, Inc. (a) | 4,194,062 | 113,869 | |
Polycom, Inc. (a) | 639,800 | 16,155 | |
QUALCOMM, Inc. | 2,323,300 | 98,554 | |
Research In Motion Ltd. (a) | 2,782,366 | 261,209 | |
871,699 | |||
Computers & Peripherals - 3.0% | |||
Apple, Inc. (a) | 1,177,000 | 159,319 | |
High Tech Computer Corp. | 1,205,000 | 22,716 | |
Network Appliance, Inc. (a) | 557,300 | 12,941 | |
Palm, Inc. (d) | 5,013,159 | 27,171 | |
222,147 | |||
Electronic Equipment & Instruments - 0.3% | |||
Trimble Navigation Ltd. (a) | 701,700 | 18,560 | |
Internet Software & Services - 12.2% | |||
Akamai Technologies, Inc. (a)(d) | 2,454,675 | 74,131 | |
Alibaba.com Ltd. | 2,642,500 | 6,256 | |
DivX, Inc. (a)(d) | 1,559,600 | 22,224 | |
eBay, Inc. (a) | 615,687 | 16,556 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Internet Software & Services - continued | |||
Google, Inc. Class A (sub. vtg.) (a) | 1,237,440 | $ 698,286 | |
India Infoline Ltd. | 310,000 | 9,186 | |
INFO Edge India Ltd. | 210,000 | 5,632 | |
Mercadolibre, Inc. | 633,850 | 23,471 | |
Omniture, Inc. (a) | 457,170 | 11,301 | |
Yahoo!, Inc. (a) | 1,900,316 | 36,448 | |
903,491 | |||
IT Services - 1.8% | |||
Cognizant Technology Solutions Corp. Class A (a) | 3,867,770 | 107,911 | |
Infosys Technologies Ltd. sponsored ADR | 673,900 | 27,899 | |
135,810 | |||
Semiconductors & Semiconductor Equipment - 6.1% | |||
Applied Materials, Inc. | 4,423,951 | 79,277 | |
Broadcom Corp. Class A (a)(d) | 1,704,150 | 37,628 | |
Cavium Networks, Inc. | 1,594,519 | 30,471 | |
Cree, Inc. (a)(d) | 2,083,900 | 61,579 | |
Cypress Semiconductor Corp. (a) | 813,950 | 17,296 | |
Intel Corp. | 996,600 | 21,128 | |
Marvell Technology Group Ltd. (a) | 7,588,200 | 90,072 | |
Omnivision Technologies, Inc. (a)(d)(e) | 3,255,295 | 46,095 | |
Power Integrations, Inc. (a) | 413,200 | 10,528 | |
Rubicon Technology, Inc. | 312,400 | 7,388 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 1,146,900 | 36,942 | |
Xilinx, Inc. | 616,400 | 13,481 | |
451,885 | |||
Software - 22.1% | |||
Activision, Inc. (a) | 4,521,600 | 116,974 | |
Electronic Arts, Inc. (a) | 763,200 | 36,153 | |
Gameloft (a) | 800,063 | 3,332 | |
Microsoft Corp. | 15,532,700 | 506,366 | |
Nintendo Co. Ltd. | 1,045,700 | 516,576 | |
Nintendo Co. Ltd. ADR | 3,760,300 | 232,199 | |
Nuance Communications, Inc. (a)(d) | 3,576,400 | 56,829 | |
Oracle Corp. (a) | 2,907,000 | 59,739 | |
Quest Software, Inc. (a) | 100,000 | 1,495 | |
Shanda Interactive Entertainment Ltd. sponsored ADR (a) | 2,070,800 | 56,926 | |
Common Stocks - continued | |||
Shares | Value (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Software - continued | |||
Take-Two Interactive Software, Inc. (a)(d) | 1,088,421 | $ 17,894 | |
VMware, Inc. Class A (d) | 462,783 | 26,217 | |
1,630,700 | |||
TOTAL INFORMATION TECHNOLOGY | 4,234,292 | ||
MATERIALS - 1.8% | |||
Chemicals - 1.3% | |||
Monsanto Co. | 507,200 | 57,030 | |
The Mosaic Co. (a) | 407,400 | 37,077 | |
94,107 | |||
Containers & Packaging - 0.1% | |||
Smurfit-Stone Container Corp. (a) | 858,700 | 8,149 | |
Metals & Mining - 0.4% | |||
Lihir Gold Ltd. sponsored ADR | 241,700 | 7,952 | |
Randgold Resources Ltd. sponsored ADR | 247,400 | 11,803 | |
Steel Dynamics, Inc. | 243,900 | 12,719 | |
32,474 | |||
TOTAL MATERIALS | 134,730 | ||
TELECOMMUNICATION SERVICES - 0.0% | |||
Diversified Telecommunication Services - 0.0% | |||
Level 3 Communications, Inc. (a) | 500,000 | 1,720 | |
TOTAL COMMON STOCKS (Cost $6,478,886) | 7,307,803 | ||
Money Market Funds - 6.2% | |||
Shares | Value (000s) | ||
Fidelity Cash Central Fund, 3.79% (b) | 121,137,801 | $ 121,138 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 336,209,587 | 336,210 | |
TOTAL MONEY MARKET FUNDS (Cost $457,348) | 457,348 | ||
TOTAL INVESTMENT PORTFOLIO - 105.0% (Cost $6,936,234) | 7,765,151 | ||
NET OTHER ASSETS - (5.0)% | (372,609) | ||
NET ASSETS - 100% | $ 7,392,542 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
(f) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $32,808,000 or 0.4% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Illumina, Inc. warrants 11/22/10 | 11/21/05 | $ 0 |
Illumina, Inc. warrants 1/19/11 | 1/18/06 | $ 0 |
Provogue (India) Ltd. | 2/21/07 | $ 7,157 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,537 |
Fidelity Securities Lending Cash Central Fund | 3,372 |
Total | $ 4,909 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
Deckers Outdoor Corp. | $ 69,644 | $ 5,734 | $ - | $ - | $ 89,293 |
Indevus Pharmaceuticals, Inc. | - | 29,730 | - | - | 24,667 |
Omnivision Technologies, Inc. | 67,769 | 1,938 | 14,472 | - | 46,095 |
True Religion Apparel, Inc. | - | 33,339 | - | - | 32,169 |
Total | $ 137,413 | $ 70,741 | $ 14,472 | $ - | $ 192,224 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 77.9% |
Japan | 10.1% |
Canada | 3.6% |
India | 2.1% |
Cayman Islands | 1.6% |
Bermuda | 1.2% |
Others (individually less than 1%) | 3.5% |
100.0% |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $3,019,619,000 of which $1,769,724,000 and $1,249,895,000 will expire on July 31, 2010 and 2011, respectively. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) (Unaudited) | January 31, 2008 | |
Assets | ||
Investment in securities, at value (including securities loaned of $333,683) - See accompanying schedule: Unaffiliated issuers (cost $6,333,710) | $ 7,115,579 | |
Fidelity Central Funds (cost $457,348) | 457,348 | |
Other affiliated issuers (cost $145,176) | 192,224 | |
Total Investments (cost $6,936,234) | $ 7,765,151 | |
Foreign currency held at value (cost $1,993) | 1,994 | |
Receivable for investments sold | 87,366 | |
Receivable for fund shares sold | 7,007 | |
Dividends receivable | 118 | |
Distributions receivable from Fidelity Central Funds | 929 | |
Prepaid expenses | 28 | |
Other receivables | 503 | |
Total assets | 7,863,096 | |
Liabilities | ||
Payable for investments purchased | $ 116,907 | |
Payable for fund shares redeemed | 7,064 | |
Accrued management fee | 5,332 | |
Other affiliated payables | 1,671 | |
Other payables and accrued expenses | 3,370 | |
Collateral on securities loaned, at value | 336,210 | |
Total liabilities | 470,554 | |
Net Assets | $ 7,392,542 | |
Net Assets consist of: | ||
Paid in capital | $ 9,034,007 | |
Accumulated net investment loss | (26,995) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,440,514) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 826,044 | |
Net Assets, for 164,282 shares outstanding | $ 7,392,542 | |
Net Asset Value, offering price and redemption price per share ($7,392,542 ÷ 164,282 shares) | $ 45.00 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands (Unaudited) | Six months ended January 31, 2008 | |
Investment Income | ||
Dividends | $ 10,818 | |
Special dividends | 3,114 | |
Interest | 162 | |
Income from Fidelity Central Funds (including $3,372 from security lending) | 4,909 | |
Total income | 19,003 | |
Expenses | ||
Management fee | $ 27,171 | |
Performance adjustment | 8,242 | |
Transfer agent fees | 9,512 | |
Accounting and security lending fees | 659 | |
Custodian fees and expenses | 218 | |
Independent trustees' compensation | 18 | |
Appreciation in deferred trustee compensation account | 1 | |
Registration fees | 91 | |
Audit | 51 | |
Legal | 35 | |
Interest | 6 | |
Miscellaneous | 281 | |
Total expenses before reductions | 46,285 | |
Expense reductions | (379) | 45,906 |
Net investment income (loss) | (26,903) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $1,992) | 610,359 | |
Other affiliated issuers | 1,397 | |
Foreign currency transactions | (361) | |
Total net realized gain (loss) | 611,395 | |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $2,289) | (854,290) | |
Assets and liabilities in foreign currencies | 96 | |
Total change in net unrealized appreciation (depreciation) | (854,194) | |
Net gain (loss) | (242,799) | |
Net increase (decrease) in net assets resulting from operations | $ (269,702) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (26,903) | $ (39,204) |
Net realized gain (loss) | 611,395 | 817,535 |
Change in net unrealized appreciation (depreciation) | (854,194) | 1,784,972 |
Net increase (decrease) in net assets resulting | (269,702) | 2,563,303 |
Share transactions | 1,204,559 | 1,230,037 |
Cost of shares redeemed | (2,320,228) | (2,384,937) |
Net increase (decrease) in net assets resulting from share transactions | (1,115,669) | (1,154,900) |
Total increase (decrease) in net assets | (1,385,371) | 1,408,403 |
Net Assets | ||
Beginning of period | 8,777,913 | 7,369,510 |
End of period (including accumulated net investment loss of $26,995 and accumulated net investment loss of $92, respectively) | $ 7,392,542 | $ 8,777,913 |
Other Information Shares | ||
Sold | 23,698 | 29,892 |
Redeemed | (45,808) | (55,876) |
Net increase (decrease) | (22,110) | (25,984) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | |||||
(Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 47.09 | $ 34.70 | $ 35.99 | $ 30.43 | $ 28.33 | $ 23.46 |
Income from Investment Operations | ||||||
Net investment income (loss) D | (.15) G | (.19) | (.10) H | .37 I | (.17) | (.17) |
Net realized and unrealized gain (loss) | (1.94) | 12.58 | (1.19) | 5.60 | 2.27 | 5.04 |
Total from investment operations | (2.09) | 12.39 | (1.29) | 5.97 | 2.10 | 4.87 |
Distributions from net investment income | - | - | - | (.41) | - | - |
Net asset value, end of period | $ 45.00 | $ 47.09 | $ 34.70 | $ 35.99 | $ 30.43 | $ 28.33 |
Total Return B, C | (4.44) % | 35.71% | (3.58)% | 19.70% | 7.41% | 20.76% |
Ratios to Average Net Assets E, J | ||||||
Expenses before reductions | 1.03% A | .96% | .80% | .81% | .91% | 1.18% |
Expenses net of fee waivers, if any | 1.03% A | .96% | .80% | .81% | .91% | 1.18% |
Expenses net of all reductions | 1.02% A | .95% | .75% | .75% | .89% | 1.12% |
Net investment income (loss) | (.60)% A,G | (.45)% | (.26)% H | 1.13% I | (.53)% | (.71)% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 7,393 | $ 8,778 | $ 7,370 | $ 8,063 | $ 7,322 | $ 7,041 |
Portfolio turnover rate F | 135% A | 121% | 149% | 117% | 61% | 116% |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.02 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.67)%.
H Investment income per share reflects a special dividend which amounted to $.03 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.34)%.
I Investment income per share reflects a special dividend which amounted to $.46 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.27)%.
J Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity OTC Portfolio (the Fund) is a non-diversified fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital
Semiannual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
distributions or capital gain distributions. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), Independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), partnerships, deferred trustees compensation, net operating losses, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 1,489,851 | |
Unrealized depreciation | (683,752) | |
Net unrealized appreciation (depreciation) | $ 806,099 | |
Cost for federal income tax purposes | $ 6,959,052 |
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $5,989,297 and $7,139,136, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .35% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .79% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .21% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the Fund's transfer agent.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $116 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily | Weighted Average | Interest |
Borrower | $ 12,164 | 4.72% | $ 6 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $12 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated
Semiannual Report
8. Security Lending - continued
with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $104 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $9 and $266, respectively.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $1,246.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
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Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
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Making Changes
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General Correspondence
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For Retirement
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Buying shares
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Selling shares
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P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
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Semiannual Report
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Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
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Fidelity®
Small Cap Growth
Fund
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines.") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
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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.
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 fund's most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 953.90 | $ 6.88 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | |||
Actual | $ 1,000.00 | $ 952.80 | $ 8.10 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | |||
Actual | $ 1,000.00 | $ 950.30 | $ 10.54 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | |||
Actual | $ 1,000.00 | $ 950.20 | $ 10.54 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Small Cap Growth | |||
Actual | $ 1,000.00 | $ 955.70 | $ 5.46 |
HypotheticalA | $ 1,000.00 | $ 1,019.56 | $ 5.63 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 955.50 | $ 5.06 |
HypotheticalA | $ 1,000.00 | $ 1,019.96 | $ 5.23 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Small Cap Growth | 1.11% |
Institutional Class | 1.03% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Blackbaud, Inc. | 1.6 | 1.2 |
Superior Energy Services, Inc. | 1.5 | 1.1 |
Harris Corp. | 1.4 | 1.5 |
Chicago Bridge & Iron Co. NV (NY Shares) | 1.4 | 0.8 |
Humana, Inc. | 1.3 | 0.9 |
Huron Consulting Group, Inc. | 1.3 | 1.2 |
Tessera Technologies, Inc. | 1.3 | 1.0 |
j2 Global Communications, Inc. | 1.3 | 1.3 |
MF Global Ltd. | 1.2 | 0.0 |
Pharmaceutical Product Development, Inc. | 1.2 | 0.9 |
13.5 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Information Technology | 22.0 | 24.4 |
Health Care | 19.4 | 16.9 |
Industrials | 18.0 | 18.0 |
Energy | 13.3 | 10.7 |
Consumer Discretionary | 8.2 | 9.3 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 97.4% | ![]() | Stocks 95.9% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 13.9% | ** Foreign | 10.2% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.4% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 8.2% | |||
Auto Components - 0.9% | |||
WABCO Holdings, Inc. | 293,600 | $ 11,829,144 | |
Diversified Consumer Services - 1.2% | |||
Apollo Group, Inc. Class A (non-vtg.) (a) | 102,200 | 8,149,428 | |
Strayer Education, Inc. | 45,000 | 7,766,100 | |
15,915,528 | |||
Hotels, Restaurants & Leisure - 1.1% | |||
Life Time Fitness, Inc. (a)(d) | 172,100 | 7,630,914 | |
Ruth's Chris Steak House, Inc. (a)(d) | 871,566 | 7,216,566 | |
14,847,480 | |||
Internet & Catalog Retail - 0.6% | |||
Priceline.com, Inc. (a) | 75,000 | 8,139,000 | |
Media - 0.6% | |||
Dolan Media Co. | 236,400 | 5,356,824 | |
New Frontier Media, Inc. | 470,565 | 2,103,426 | |
7,460,250 | |||
Specialty Retail - 2.3% | |||
Advance Auto Parts, Inc. | 239,900 | 8,559,632 | |
Citi Trends, Inc. (a) | 102,885 | 1,406,438 | |
Collective Brands, Inc. (a)(d) | 463,500 | 8,166,870 | |
The Men's Wearhouse, Inc. | 269,900 | 6,879,751 | |
Tween Brands, Inc. (a) | 210,600 | 6,745,518 | |
31,758,209 | |||
Textiles, Apparel & Luxury Goods - 1.5% | |||
American Apparel, Inc. (a)(d) | 225,700 | 2,843,820 | |
Crocs, Inc. (a)(d) | 224,800 | 7,820,792 | |
Iconix Brand Group, Inc. (a) | 489,100 | 10,168,389 | |
20,833,001 | |||
TOTAL CONSUMER DISCRETIONARY | 110,782,612 | ||
CONSUMER STAPLES - 3.6% | |||
Food Products - 1.1% | |||
Corn Products International, Inc. | 200,000 | 6,760,000 | |
Dean Foods Co. | 300,000 | 8,400,000 | |
15,160,000 | |||
Personal Products - 2.5% | |||
Bare Escentuals, Inc. (a)(d) | 449,200 | 10,708,928 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER STAPLES - continued | |||
Personal Products - continued | |||
Chattem, Inc. (a)(d) | 210,500 | $ 16,149,560 | |
Physicians Formula Holdings, Inc. (a)(e) | 728,005 | 6,901,487 | |
33,759,975 | |||
TOTAL CONSUMER STAPLES | 48,919,975 | ||
ENERGY - 13.3% | |||
Energy Equipment & Services - 4.3% | |||
Atwood Oceanics, Inc. (a) | 187,900 | 15,612,611 | |
Exterran Holdings, Inc. (a) | 115,000 | 7,502,600 | |
Grey Wolf, Inc. (a) | 1,204,300 | 7,177,628 | |
Hornbeck Offshore Services, Inc. (a)(d) | 192,200 | 7,434,296 | |
Superior Energy Services, Inc. (a) | 516,400 | 20,702,476 | |
58,429,611 | |||
Oil, Gas & Consumable Fuels - 9.0% | |||
Cabot Oil & Gas Corp. | 290,100 | 11,223,969 | |
Energy Transfer Equity LP | 222,100 | 7,331,521 | |
EXCO Resources, Inc. (a) | 533,000 | 7,989,670 | |
Forest Oil Corp. (a) | 305,033 | 13,793,592 | |
Mariner Energy, Inc. (a) | 485,710 | 12,171,893 | |
Massey Energy Co. | 341,000 | 12,678,380 | |
Petrohawk Energy Corp. (a) | 727,100 | 11,451,825 | |
Petroplus Holdings AG (a) | 80,300 | 4,944,382 | |
Range Resources Corp. | 216,350 | 11,297,797 | |
Tesoro Corp. | 375,400 | 14,659,370 | |
Western Refining, Inc. (d) | 660,700 | 14,105,945 | |
121,648,344 | |||
TOTAL ENERGY | 180,077,955 | ||
FINANCIALS - 6.6% | |||
Capital Markets - 2.0% | |||
Janus Capital Group, Inc. | 395,800 | 10,690,558 | |
MF Global Ltd. | 558,000 | 16,767,900 | |
27,458,458 | |||
Commercial Banks - 0.8% | |||
UMB Financial Corp. | 237,624 | 10,011,099 | |
Consumer Finance - 0.8% | |||
Dollar Financial Corp. (a) | 426,078 | 10,728,644 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Insurance - 2.6% | |||
Aspen Insurance Holdings Ltd. | 325,500 | $ 9,185,610 | |
National Financial Partners Corp. (d) | 284,400 | 10,266,840 | |
StanCorp Financial Group, Inc. | 173,582 | 8,541,970 | |
Willis Group Holdings Ltd. | 206,800 | 7,287,632 | |
35,282,052 | |||
Real Estate Management & Development - 0.4% | |||
CB Richard Ellis Group, Inc. Class A (a) | 298,100 | 5,786,121 | |
TOTAL FINANCIALS | 89,266,374 | ||
HEALTH CARE - 19.4% | |||
Biotechnology - 1.7% | |||
Cephalon, Inc. (a)(d) | 170,700 | 11,203,041 | |
Grifols SA | 496,802 | 12,139,322 | |
23,342,363 | |||
Health Care Equipment & Supplies - 5.4% | |||
American Medical Systems Holdings, Inc. (a)(d) | 916,400 | 13,095,356 | |
Hillenbrand Industries, Inc. | 195,800 | 10,126,776 | |
Hologic, Inc. (a)(d) | 148,000 | 9,525,280 | |
Integra LifeSciences Holdings Corp. (a)(d) | 325,100 | 13,524,160 | |
Inverness Medical Innovations, Inc. (a)(d) | 200,400 | 9,028,020 | |
Kinetic Concepts, Inc. (a)(d) | 199,100 | 9,911,198 | |
ResMed, Inc. (a)(d) | 171,800 | 8,002,444 | |
73,213,234 | |||
Health Care Providers & Services - 8.2% | |||
Healthways, Inc. (a) | 287,218 | 16,170,373 | |
Henry Schein, Inc. (a) | 238,900 | 13,887,257 | |
Humana, Inc. (a) | 222,100 | 17,834,630 | |
Patterson Companies, Inc. (a) | 351,000 | 11,246,040 | |
PSS World Medical, Inc. (a)(d) | 632,399 | 10,934,179 | |
Sun Healthcare Group, Inc. (a) | 877,900 | 15,126,217 | |
Universal American Financial Corp. (a) | 470,831 | 9,854,493 | |
VCA Antech, Inc. (a) | 408,700 | 15,800,342 | |
110,853,531 | |||
Health Care Technology - 0.5% | |||
Cerner Corp. (a) | 128,500 | 6,733,400 | |
Life Sciences Tools & Services - 3.0% | |||
Charles River Laboratories International, Inc. (a) | 158,000 | 9,811,800 | |
ICON PLC sponsored ADR (a) | 152,990 | 9,589,413 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Life Sciences Tools & Services - continued | |||
PAREXEL International Corp. (a) | 80,000 | $ 4,352,800 | |
Pharmaceutical Product Development, Inc. | 385,900 | 16,732,624 | |
40,486,637 | |||
Pharmaceuticals - 0.6% | |||
Medicis Pharmaceutical Corp. Class A (d) | 366,700 | 7,447,677 | |
TOTAL HEALTH CARE | 262,076,842 | ||
INDUSTRIALS - 18.0% | |||
Aerospace & Defense - 1.1% | |||
Hexcel Corp. (a)(d) | 651,900 | 14,230,977 | |
Airlines - 0.7% | |||
Delta Air Lines, Inc. (a) | 542,200 | 9,125,226 | |
Commercial Services & Supplies - 6.3% | |||
Advisory Board Co. (a) | 115,000 | 7,327,800 | |
CDI Corp. | 522,700 | 10,166,515 | |
Clean Harbors, Inc. (a) | 145,500 | 8,072,340 | |
Corrections Corp. of America (a) | 501,200 | 13,301,848 | |
CoStar Group, Inc. (a) | 181,736 | 7,694,702 | |
Huron Consulting Group, Inc. (a)(d) | 246,700 | 17,717,994 | |
InnerWorkings, Inc. (a)(d) | 650,900 | 9,014,965 | |
Navigant Consulting, Inc. (a) | 321,500 | 3,806,560 | |
The Brink's Co. | 142,100 | 8,615,523 | |
85,718,247 | |||
Construction & Engineering - 3.8% | |||
Chicago Bridge & Iron Co. NV (NY Shares) | 414,700 | 18,450,003 | |
Fluor Corp. | 96,600 | 11,753,322 | |
KBR, Inc. (a) | 362,300 | 11,445,057 | |
URS Corp. (a) | 232,025 | 10,185,898 | |
51,834,280 | |||
Electrical Equipment - 1.3% | |||
EnerSys (a) | 359,600 | 8,285,184 | |
Q-Cells AG (a)(d) | 100,600 | 9,466,274 | |
17,751,458 | |||
Industrial Conglomerates - 0.6% | |||
Raven Industries, Inc. (d) | 254,700 | 7,646,094 | |
Machinery - 2.9% | |||
Bucyrus International, Inc. Class A (d) | 169,400 | 15,705,074 | |
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Machinery - continued | |||
Flowserve Corp. | 184,033 | $ 15,112,790 | |
Hexagon AB (B Shares) | 452,600 | 8,001,028 | |
38,818,892 | |||
Road & Rail - 1.0% | |||
J.B. Hunt Transport Services, Inc. | 150,000 | 4,665,000 | |
Knight Transportation, Inc. (d) | 548,300 | 9,408,828 | |
14,073,828 | |||
Transportation Infrastructure - 0.3% | |||
Quixote Corp. | 249,600 | 4,225,728 | |
TOTAL INDUSTRIALS | 243,424,730 | ||
INFORMATION TECHNOLOGY - 22.0% | |||
Communications Equipment - 3.7% | |||
Harris Corp. | 353,700 | 19,343,853 | |
NETGEAR, Inc. (a) | 300,000 | 7,998,000 | |
Nice Systems Ltd. sponsored ADR (a) | 326,200 | 9,984,982 | |
Polycom, Inc. (a) | 488,500 | 12,334,625 | |
49,661,460 | |||
Computers & Peripherals - 0.6% | |||
Wincor Nixdorf AG | 109,200 | 8,472,312 | |
Electronic Equipment & Instruments - 1.4% | |||
Cogent, Inc. (a)(d) | 859,400 | 8,473,684 | |
Trimble Navigation Ltd. (a) | 412,600 | 10,913,270 | |
19,386,954 | |||
Internet Software & Services - 4.7% | |||
Equinix, Inc. (a)(d) | 214,100 | 16,170,973 | |
j2 Global Communications, Inc. (a)(d) | 770,400 | 16,879,464 | |
Telecity Group PLC | 1,951,500 | 9,372,018 | |
ValueClick, Inc. (a) | 622,000 | 13,578,260 | |
VistaPrint Ltd. (a) | 201,100 | 7,482,931 | |
63,483,646 | |||
IT Services - 4.0% | |||
CACI International, Inc. Class A (a) | 216,100 | 9,419,799 | |
CyberSource Corp. (a) | 867,866 | 14,536,756 | |
Datacash Group PLC | 1,661,200 | 10,158,711 | |
Satyam Computer Services Ltd. sponsored ADR (d) | 606,300 | 14,763,405 | |
WNS Holdings Ltd. ADR (a) | 334,500 | 5,823,645 | |
54,702,316 | |||
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Semiconductors & Semiconductor Equipment - 4.6% | |||
FormFactor, Inc. (a) | 358,900 | $ 8,692,558 | |
Hittite Microwave Corp. (a) | 351,821 | 14,009,512 | |
Microsemi Corp. (a)(d) | 476,800 | 10,832,896 | |
SiRF Technology Holdings, Inc. (a)(d) | 319,300 | 4,888,483 | |
Tessera Technologies, Inc. (a)(d) | 439,100 | 17,199,547 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 215,000 | 6,925,150 | |
62,548,146 | |||
Software - 3.0% | |||
Ansys, Inc. (a) | 299,500 | 10,455,545 | |
Blackbaud, Inc. | 798,259 | 22,087,827 | |
THQ, Inc. (a) | 410,000 | 7,384,100 | |
39,927,472 | |||
TOTAL INFORMATION TECHNOLOGY | 298,182,306 | ||
MATERIALS - 4.5% | |||
Metals & Mining - 4.5% | |||
Carpenter Technology Corp. | 252,700 | 15,576,428 | |
IAMGOLD Corp. | 1,187,900 | 9,469,583 | |
Reliance Steel & Aluminum Co. | 315,700 | 15,535,597 | |
Titanium Metals Corp. (d) | 548,500 | 11,924,390 | |
Yamana Gold, Inc. | 506,004 | 8,395,164 | |
60,901,162 | |||
TELECOMMUNICATION SERVICES - 0.5% | |||
Diversified Telecommunication Services - 0.5% | |||
Cbeyond, Inc. (a) | 216,000 | 7,287,840 | |
UTILITIES - 1.3% | |||
Multi-Utilities - 1.3% | |||
A2A SpA | 2,147,700 | 8,635,742 | |
CMS Energy Corp. | 607,200 | 9,514,824 | |
18,150,566 | |||
TOTAL COMMON STOCKS (Cost $1,314,226,957) | 1,319,070,362 | ||
Money Market Funds - 13.5% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 41,578,198 | $ 41,578,198 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 141,651,625 | 141,651,625 | |
TOTAL MONEY MARKET FUNDS (Cost $183,229,823) | 183,229,823 | ||
TOTAL INVESTMENT PORTFOLIO - 110.9% (Cost $1,497,456,780) | 1,502,300,185 | ||
NET OTHER ASSETS - (10.9)% | (147,976,223) | ||
NET ASSETS - 100% | $ 1,354,323,962 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,165,692 |
Fidelity Securities Lending Cash Central Fund | 251,103 |
Total | $ 1,416,795 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
Physicians Formula Holdings, Inc. | $ 5,827,585 | $ 3,948,990 | $ - | $ - | $ 6,901,487 |
Quixote Corp. | 8,618,526 | 150,375 | 3,920,750 | 75,980 | - |
Total | $ 14,446,111 | $ 4,099,365 | $ 3,920,750 | $ 75,980 | $ 6,901,487 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 86.1% |
Bermuda | 3.0% |
United Kingdom | 1.8% |
Netherlands | 1.4% |
Germany | 1.3% |
Canada | 1.3% |
India | 1.1% |
Others (individually less than 1%) | 4.0% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $139,978,566) - See accompanying schedule: Unaffiliated issuers (cost $1,303,908,585) | $ 1,312,168,875 | |
Fidelity Central Funds (cost $183,229,823) | 183,229,823 | |
Other affiliated issuers (cost $10,318,372) | 6,901,487 | |
Total Investments (cost $1,497,456,780) | $ 1,502,300,185 | |
Cash | 19 | |
Receivable for investments sold | 25,402,734 | |
Receivable for fund shares sold | 4,335,623 | |
Dividends receivable | 123,352 | |
Distributions receivable from Fidelity Central Funds | 242,715 | |
Prepaid expenses | 3,890 | |
Receivable from investment adviser for expense reductions | 2,088 | |
Other receivables | 13,636 | |
Total assets | 1,532,424,242 | |
Liabilities | ||
Payable for investments purchased | $ 33,554,357 | |
Payable for fund shares redeemed | 1,552,214 | |
Accrued management fee | 900,515 | |
Distribution fees payable | 42,096 | |
Other affiliated payables | 333,109 | |
Other payables and accrued expenses | 66,364 | |
Collateral on securities loaned, at value | 141,651,625 | |
Total liabilities | 178,100,280 | |
Net Assets | $ 1,354,323,962 | |
Net Assets consist of: | ||
Paid in capital | $ 1,354,332,960 | |
Accumulated net investment loss | (3,396,049) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,456,146) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,843,197 | |
Net Assets | $ 1,354,323,962 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 14.35 | |
Maximum offering price per share (100/94.25 of $14.35) | $ 15.23 | |
Class T: | $ 14.34 | |
Maximum offering price per share (100/96.50 of $14.34) | $ 14.86 | |
Class B: | $ 14.22 | |
Class C: | $ 14.19 | |
Small Cap Growth: | $ 14.43 | |
Institutional Class: | $ 14.43 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends (including $75,980 earned from other affiliated issuers) | $ 2,820,079 | |
Interest | 1,702 | |
Income from Fidelity Central Funds (including $251,103 from security lending) | 1,416,795 | |
Total income | 4,238,576 | |
Expenses | ||
Management fee | $ 4,702,056 | |
Performance adjustment | 560,838 | |
Transfer agent fees | 1,756,793 | |
Distribution fees | 262,148 | |
Accounting and security lending fees | 221,763 | |
Custodian fees and expenses | 17,635 | |
Independent trustees' compensation | 2,629 | |
Registration fees | 96,115 | |
Audit | 29,130 | |
Legal | 3,155 | |
Miscellaneous | 39,369 | |
Total expenses before reductions | 7,691,631 | |
Expense reductions | (57,006) | 7,634,625 |
Net investment income (loss) | (3,396,049) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 1,698,694 | |
Other affiliated issuers | (587,612) | |
Foreign currency transactions | (6,104) | |
Total net realized gain (loss) | 1,104,978 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (67,163,843) | |
Assets and liabilities in foreign currencies | 41 | |
Total change in net unrealized appreciation (depreciation) | (67,163,802) | |
Net gain (loss) | (66,058,824) | |
Net increase (decrease) in net assets resulting from operations | $ (69,454,873) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (3,396,049) | $ (4,437,632) |
Net realized gain (loss) | 1,104,978 | 87,862,892 |
Change in net unrealized appreciation (depreciation) | (67,163,802) | 65,702,764 |
Net increase (decrease) in net assets resulting | (69,454,873) | 149,128,024 |
Distributions to shareholders from net realized gain | (81,200,206) | (3,591,980) |
Share transactions - net increase (decrease) | 247,620,139 | 637,612,035 |
Redemption fees | 282,107 | 160,118 |
Total increase (decrease) in net assets | 97,247,167 | 783,308,197 |
Net Assets | ||
Beginning of period | 1,257,076,795 | 473,768,598 |
End of period (including accumulated net investment loss of $3,396,049 and $0, respectively) | $ 1,354,323,962 | $ 1,257,076,795 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.06 | $ 12.88 | $ 12.95 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.06) | (.12) H | (.10) I | (.07) |
Net realized and unrealized gain (loss) | (.63) | 3.39 | .18 | 3.01 |
Total from investment operations | (.69) | 3.27 | .08 | 2.94 |
Distributions from net realized gain | (1.02) | (.09) | (.16) | - |
Redemption fees added to paid in capital E | - L | - L | .01 | .01 |
Net asset value, end of period | $ 14.35 | $ 16.06 | $ 12.88 | $ 12.95 |
Total Return B, C, D | (4.61)% | 25.52% | .70% | 29.50% |
Ratios to Average Net Assets F, K | ||||
Expenses before reductions | 1.41% A | 1.44% | 1.53% | 1.55%A |
Expenses net of fee waivers, if any | 1.40%A | 1.40% | 1.40% | 1.45%A |
Expenses net of all reductions | 1.40%A | 1.39% | 1.35% | 1.36%A |
Net investment income (loss) | (.76)%A | (.80)%H | (.79)%I | (.78)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 38,339 | $ 33,588 | $ 18,104 | $ 4,719 |
Portfolio turnover rate G | 96%A | 91% | 129% | 93%A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.84)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.85)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.01 | $ 12.86 | $ 12.93 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.08) | (.16)H | (.14)I | (.09) |
Net realized and unrealized gain (loss) | (.63) | 3.38 | .19 | 3.01 |
Total from investment operations | (.71) | 3.22 | .05 | 2.92 |
Distributions from net realized gain | (.96) | (.07) | (.13) | - |
Redemption fees added to paid in capitalE | - L | -L | .01 | .01 |
Net asset value, end of period | $ 14.34 | $ 16.01 | $ 12.86 | $ 12.93 |
Total ReturnB, C, D | (4.72)% | 25.18% | .48% | 29.30% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 1.67%A | 1.67% | 1.73% | 1.79%A |
Expenses net of fee waivers, if any | 1.65%A | 1.65% | 1.65% | 1.70%A |
Expenses net of all reductions | 1.65%A | 1.65% | 1.60% | 1.61%A |
Net investment income (loss) | (1.01)%A | (1.05)%H | (1.04)%I | (1.03)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 23,498 | $ 26,419 | $ 19,205 | $ 5,240 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.09)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.10)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.85 | $ 12.78 | $ 12.87 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.12) | (.23)H | (.20)I | (.13) |
Net realized and unrealized gain (loss) | (.62) | 3.36 | .19 | 2.99 |
Total from investment operations | (.74) | 3.13 | (.01) | 2.86 |
Distributions from net realized gain | (.89) | (.06) | (.09) | - |
Redemption fees added to paid in capitalE | -L | -L | .01 | .01 |
Net asset value, end of period | $ 14.22 | $ 15.85 | $ 12.78 | $ 12.87 |
Total ReturnB, C, D | (4.97)% | 24.57% | (.03)% | 28.70% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 2.16%A | 2.20% | 2.28% | 2.33%A |
Expenses net of fee waivers, if any | 2.15%A | 2.15% | 2.15% | 2.20%A |
Expenses net of all reductions | 2.15%A | 2.15% | 2.10% | 2.11%A |
Net investment income (loss) | (1.51)%A | (1.55)%H | (1.54)%I | (1.53)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 6,106 | $ 6,242 | $ 5,191 | $ 2,055 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.59)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.84 | $ 12.77 | $ 12.88 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.12) | (.23)H | (.20)I | (.13) |
Net realized and unrealized gain (loss) | (.62) | 3.36 | .18 | 3.00 |
Total from investment operations | (.74) | 3.13 | (.02) | 2.87 |
Distributions from net realized gain | (.91) | (.06) | (.10) | - |
Redemption fees added to paid in capitalE | -L | -L | .01 | .01 |
Net asset value, end of period | $ 14.19 | $ 15.84 | $ 12.77 | $ 12.88 |
Total ReturnB, C, D | (4.98)% | 24.59% | (.08)% | 28.80% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 2.16%A | 2.20% | 2.25% | 2.24%A |
Expenses net of fee waivers, if any | 2.15%A | 2.15% | 2.15% | 2.17%A |
Expenses net of all reductions | 2.15%A | 2.14% | 2.10% | 2.09%A |
Net investment income (loss) | (1.51)%A | (1.55)%H | (1.54)%I | (1.50)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 22,216 | $ 22,348 | $ 14,682 | $ 8,372 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.59)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Growth
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005I | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.15 | $ 12.93 | $ 12.98 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)D | (.04) | (.08)G | (.07)H | (.04) |
Net realized and unrealized gain (loss) | (.63) | 3.40 | .19 | 3.01 |
Total from investment operations | (.67) | 3.32 | .12 | 2.97 |
Distributions from net realized gain | (1.05) | (.10) | (.18) | - |
Redemption fees added to paid in capitalD | -K | -K | .01 | .01 |
Net asset value, end of period | $ 14.43 | $ 16.15 | $ 12.93 | $ 12.98 |
Total ReturnB, C | (4.43)% | 25.84% | 1.01% | 29.80% |
Ratios to Average Net AssetsE, J | ||||
Expenses before reductions | 1.11%A | 1.10% | 1.13% | 1.16%A |
Expenses net of fee waivers, if any | 1.11%A | 1.10% | 1.13% | 1.16%A |
Expenses net of all reductions | 1.11%A | 1.09% | 1.08% | 1.08%A |
Net investment income (loss) | (.47)%A | (.50)%G | (.52)%H | (.49)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 1,241,470 | $ 1,149,809 | $ 402,353 | $ 205,652 |
Portfolio turnover rateF | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.54)%.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.58)%.
I For the period November 3, 2004 (commencement of operations) to July 31, 2005.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005I | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.15 | $ 12.92 | $ 12.97 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)D | (.03) | (.07) G | (.07) H | (.04) |
Net realized and unrealized gain (loss) | (.64) | 3.41 | .19 | 3.00 |
Total from investment operations | (.67) | 3.34 | .12 | 2.96 |
Distributions from net realized gain | (1.05) | (.11) | (.18) | - |
Redemption fees added to paid in capitalD | - K | - K | .01 | .01 |
Net asset value, end of period | $ 14.43 | $ 16.15 | $ 12.92 | $ 12.97 |
Total ReturnB, C | (4.45)% | 25.99% | .97% | 29.70% |
Ratios to Average Net AssetsE, J | ||||
Expenses before reductions | 1.03%A | 1.05% | 1.10% | 1.20%A |
Expenses net of fee waivers, if any | 1.03%A | 1.05% | 1.10% | 1.18%A |
Expenses net of all reductions | 1.03%A | 1.05% | 1.05% | 1.10%A |
Net investment income (loss) | (.39)%A | (.46)%G | (.49)%H | (.51)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 22,696 | $ 18,671 | $ 14,233 | $ 1,906 |
Portfolio turnover rateF | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.50)%.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.55)%.
I For the period November 3, 2004 (commencement of operations) to July 31, 2005.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Growth Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Small Cap Growth, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 144,310,553 |
Unrealized depreciation | (142,057,269) |
Net unrealized appreciation (depreciation) | $ 2,253,284 |
Cost for federal income tax purposes | $ 1,500,046,901 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $803,660,864 and $624,203,245, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 the retail class of the Fund, Small Cap Growth, as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .79% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 46,980 | $ 5,934 |
Class T | .25% | .25% | 65,622 | - |
Class B | .75% | .25% | 32,250 | 24,187 |
Class C | .75% | .25% | 117,296 | 22,392 |
$ 262,148 | $ 52,513 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 19,822 |
Class T | 4,228 |
Class B* | 7,091 |
Class C* | 1,524 |
$ 32,665 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for Small Cap Growth. For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 57,670 | .31 |
Class T | 41,214 | .31 |
Class B | 9,897 | .31 |
Class C | 35,879 | .31 |
Small Cap Growth | 1,595,155 | .26 |
Institutional Class | 16,978 | .18 |
$ 1,756,793 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $11,885 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,617 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.40% | $ 1,959 |
Class T | 1.65% | 1,800 |
Class B | 2.15% | 238 |
Class C | 2.15% | 816 |
$ 4,813 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $13,842 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses.
Semiannual Report
9. Expense Reductions - continued
During the period, these credits reduced the Fund's custody expenses by $3,704. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Small Cap Growth | $ 34,644 |
Institutional Class | 3 |
$ 34,647 |
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.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 2,216,913 | $ 130,212 |
Class T | 1,570,296 | 118,024 |
Class B | 348,424 | 24,691 |
Class C | 1,308,296 | 74,047 |
Small Cap Growth | 74,608,764 | 3,129,487 |
Institutional Class | 1,147,513 | 115,519 |
Total | $ 81,200,206 | $ 3,591,980 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class A | ||||
Shares sold | 821,980 | 1,113,110 | $ 12,765,692 | $ 17,060,734 |
Reinvestment of distributions | 126,731 | 8,925 | 1,912,182 | 119,928 |
Shares redeemed | (368,663) | (436,417) | (5,610,727) | (6,456,393) |
Net increase (decrease) | 580,048 | 685,618 | $ 9,067,147 | $ 10,724,269 |
Class T | ||||
Shares sold | 199,339 | 607,092 | $ 3,059,094 | $ 8,822,874 |
Reinvestment of distributions | 99,906 | 8,530 | 1,507,341 | 115,213 |
Shares redeemed | (310,797) | (459,339) | (4,715,209) | (6,905,798) |
Net increase (decrease) | (11,552) | 156,283 | $ (148,774) | $ 2,032,289 |
Class B | ||||
Shares sold | 74,756 | 121,826 | $ 1,156,276 | $ 1,800,582 |
Reinvestment of distributions | 22,166 | 1,705 | 332,232 | 23,112 |
Shares redeemed | (61,419) | (135,943) | (936,061) | (1,994,978) |
Net increase (decrease) | 35,503 | (12,412) | $ 552,447 | $ (171,284) |
Class C | ||||
Shares sold | 210,151 | 546,198 | $ 3,209,815 | $ 8,014,853 |
Reinvestment of distributions | 82,567 | 5,178 | 1,235,073 | 70,286 |
Shares redeemed | (138,075) | (290,387) | (2,062,595) | (4,244,042) |
Net increase (decrease) | 154,643 | 260,989 | $ 2,382,293 | $ 3,841,097 |
Small Cap Growth | ||||
Shares sold | 22,223,944 | 47,884,601 | $ 345,784,047 | $ 736,795,086 |
Reinvestment of distributions | 4,701,351 | 213,315 | 71,216,441 | 2,867,099 |
Shares redeemed | (12,055,856) | (8,042,099) | (187,690,484) | (119,410,062) |
Net increase (decrease) | 14,869,439 | 40,055,817 | $ 229,310,004 | $ 620,252,123 |
Institutional Class | ||||
Shares sold | 520,105 | 404,996 | $ 8,129,226 | $ 6,086,460 |
Reinvestment of distributions | 66,279 | 7,296 | 1,004,006 | 97,691 |
Shares redeemed | (170,051) | (357,460) | (2,676,210) | (5,250,610) |
Net increase (decrease) | 416,333 | 54,832 | $ 6,457,022 | $ 933,541 |
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
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Fidelity Automated
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1-800-544-5555
Press
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3 For account balances and holdings.
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*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
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Fidelity's Web Site
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* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
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Semiannual Report
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Semiannual Report
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Semiannual Report
Semiannual Report
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Fidelity Advisor
Small Cap Growth
Fund - Class A, Class T,
Class B and Class C
Semiannual Report
January 31, 2008
Class A, Class T, Class B,
and Class C are classes
of Fidelity® Small Cap
Growth Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 953.90 | $ 6.88 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | |||
Actual | $ 1,000.00 | $ 952.80 | $ 8.10 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | |||
Actual | $ 1,000.00 | $ 950.30 | $ 10.54 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | |||
Actual | $ 1,000.00 | $ 950.20 | $ 10.54 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Small Cap Growth | |||
Actual | $ 1,000.00 | $ 955.70 | $ 5.46 |
HypotheticalA | $ 1,000.00 | $ 1,019.56 | $ 5.63 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 955.50 | $ 5.06 |
HypotheticalA | $ 1,000.00 | $ 1,019.96 | $ 5.23 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Small Cap Growth | 1.11% |
Institutional Class | 1.03% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Blackbaud, Inc. | 1.6 | 1.2 |
Superior Energy Services, Inc. | 1.5 | 1.1 |
Harris Corp. | 1.4 | 1.5 |
Chicago Bridge & Iron Co. NV (NY Shares) | 1.4 | 0.8 |
Humana, Inc. | 1.3 | 0.9 |
Huron Consulting Group, Inc. | 1.3 | 1.2 |
Tessera Technologies, Inc. | 1.3 | 1.0 |
j2 Global Communications, Inc. | 1.3 | 1.3 |
MF Global Ltd. | 1.2 | 0.0 |
Pharmaceutical Product Development, Inc. | 1.2 | 0.9 |
13.5 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Information Technology | 22.0 | 24.4 |
Health Care | 19.4 | 16.9 |
Industrials | 18.0 | 18.0 |
Energy | 13.3 | 10.7 |
Consumer Discretionary | 8.2 | 9.3 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 97.4% | ![]() | Stocks 95.9% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 13.9% | ** Foreign | 10.2% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.4% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 8.2% | |||
Auto Components - 0.9% | |||
WABCO Holdings, Inc. | 293,600 | $ 11,829,144 | |
Diversified Consumer Services - 1.2% | |||
Apollo Group, Inc. Class A (non-vtg.) (a) | 102,200 | 8,149,428 | |
Strayer Education, Inc. | 45,000 | 7,766,100 | |
15,915,528 | |||
Hotels, Restaurants & Leisure - 1.1% | |||
Life Time Fitness, Inc. (a)(d) | 172,100 | 7,630,914 | |
Ruth's Chris Steak House, Inc. (a)(d) | 871,566 | 7,216,566 | |
14,847,480 | |||
Internet & Catalog Retail - 0.6% | |||
Priceline.com, Inc. (a) | 75,000 | 8,139,000 | |
Media - 0.6% | |||
Dolan Media Co. | 236,400 | 5,356,824 | |
New Frontier Media, Inc. | 470,565 | 2,103,426 | |
7,460,250 | |||
Specialty Retail - 2.3% | |||
Advance Auto Parts, Inc. | 239,900 | 8,559,632 | |
Citi Trends, Inc. (a) | 102,885 | 1,406,438 | |
Collective Brands, Inc. (a)(d) | 463,500 | 8,166,870 | |
The Men's Wearhouse, Inc. | 269,900 | 6,879,751 | |
Tween Brands, Inc. (a) | 210,600 | 6,745,518 | |
31,758,209 | |||
Textiles, Apparel & Luxury Goods - 1.5% | |||
American Apparel, Inc. (a)(d) | 225,700 | 2,843,820 | |
Crocs, Inc. (a)(d) | 224,800 | 7,820,792 | |
Iconix Brand Group, Inc. (a) | 489,100 | 10,168,389 | |
20,833,001 | |||
TOTAL CONSUMER DISCRETIONARY | 110,782,612 | ||
CONSUMER STAPLES - 3.6% | |||
Food Products - 1.1% | |||
Corn Products International, Inc. | 200,000 | 6,760,000 | |
Dean Foods Co. | 300,000 | 8,400,000 | |
15,160,000 | |||
Personal Products - 2.5% | |||
Bare Escentuals, Inc. (a)(d) | 449,200 | 10,708,928 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER STAPLES - continued | |||
Personal Products - continued | |||
Chattem, Inc. (a)(d) | 210,500 | $ 16,149,560 | |
Physicians Formula Holdings, Inc. (a)(e) | 728,005 | 6,901,487 | |
33,759,975 | |||
TOTAL CONSUMER STAPLES | 48,919,975 | ||
ENERGY - 13.3% | |||
Energy Equipment & Services - 4.3% | |||
Atwood Oceanics, Inc. (a) | 187,900 | 15,612,611 | |
Exterran Holdings, Inc. (a) | 115,000 | 7,502,600 | |
Grey Wolf, Inc. (a) | 1,204,300 | 7,177,628 | |
Hornbeck Offshore Services, Inc. (a)(d) | 192,200 | 7,434,296 | |
Superior Energy Services, Inc. (a) | 516,400 | 20,702,476 | |
58,429,611 | |||
Oil, Gas & Consumable Fuels - 9.0% | |||
Cabot Oil & Gas Corp. | 290,100 | 11,223,969 | |
Energy Transfer Equity LP | 222,100 | 7,331,521 | |
EXCO Resources, Inc. (a) | 533,000 | 7,989,670 | |
Forest Oil Corp. (a) | 305,033 | 13,793,592 | |
Mariner Energy, Inc. (a) | 485,710 | 12,171,893 | |
Massey Energy Co. | 341,000 | 12,678,380 | |
Petrohawk Energy Corp. (a) | 727,100 | 11,451,825 | |
Petroplus Holdings AG (a) | 80,300 | 4,944,382 | |
Range Resources Corp. | 216,350 | 11,297,797 | |
Tesoro Corp. | 375,400 | 14,659,370 | |
Western Refining, Inc. (d) | 660,700 | 14,105,945 | |
121,648,344 | |||
TOTAL ENERGY | 180,077,955 | ||
FINANCIALS - 6.6% | |||
Capital Markets - 2.0% | |||
Janus Capital Group, Inc. | 395,800 | 10,690,558 | |
MF Global Ltd. | 558,000 | 16,767,900 | |
27,458,458 | |||
Commercial Banks - 0.8% | |||
UMB Financial Corp. | 237,624 | 10,011,099 | |
Consumer Finance - 0.8% | |||
Dollar Financial Corp. (a) | 426,078 | 10,728,644 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Insurance - 2.6% | |||
Aspen Insurance Holdings Ltd. | 325,500 | $ 9,185,610 | |
National Financial Partners Corp. (d) | 284,400 | 10,266,840 | |
StanCorp Financial Group, Inc. | 173,582 | 8,541,970 | |
Willis Group Holdings Ltd. | 206,800 | 7,287,632 | |
35,282,052 | |||
Real Estate Management & Development - 0.4% | |||
CB Richard Ellis Group, Inc. Class A (a) | 298,100 | 5,786,121 | |
TOTAL FINANCIALS | 89,266,374 | ||
HEALTH CARE - 19.4% | |||
Biotechnology - 1.7% | |||
Cephalon, Inc. (a)(d) | 170,700 | 11,203,041 | |
Grifols SA | 496,802 | 12,139,322 | |
23,342,363 | |||
Health Care Equipment & Supplies - 5.4% | |||
American Medical Systems Holdings, Inc. (a)(d) | 916,400 | 13,095,356 | |
Hillenbrand Industries, Inc. | 195,800 | 10,126,776 | |
Hologic, Inc. (a)(d) | 148,000 | 9,525,280 | |
Integra LifeSciences Holdings Corp. (a)(d) | 325,100 | 13,524,160 | |
Inverness Medical Innovations, Inc. (a)(d) | 200,400 | 9,028,020 | |
Kinetic Concepts, Inc. (a)(d) | 199,100 | 9,911,198 | |
ResMed, Inc. (a)(d) | 171,800 | 8,002,444 | |
73,213,234 | |||
Health Care Providers & Services - 8.2% | |||
Healthways, Inc. (a) | 287,218 | 16,170,373 | |
Henry Schein, Inc. (a) | 238,900 | 13,887,257 | |
Humana, Inc. (a) | 222,100 | 17,834,630 | |
Patterson Companies, Inc. (a) | 351,000 | 11,246,040 | |
PSS World Medical, Inc. (a)(d) | 632,399 | 10,934,179 | |
Sun Healthcare Group, Inc. (a) | 877,900 | 15,126,217 | |
Universal American Financial Corp. (a) | 470,831 | 9,854,493 | |
VCA Antech, Inc. (a) | 408,700 | 15,800,342 | |
110,853,531 | |||
Health Care Technology - 0.5% | |||
Cerner Corp. (a) | 128,500 | 6,733,400 | |
Life Sciences Tools & Services - 3.0% | |||
Charles River Laboratories International, Inc. (a) | 158,000 | 9,811,800 | |
ICON PLC sponsored ADR (a) | 152,990 | 9,589,413 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Life Sciences Tools & Services - continued | |||
PAREXEL International Corp. (a) | 80,000 | $ 4,352,800 | |
Pharmaceutical Product Development, Inc. | 385,900 | 16,732,624 | |
40,486,637 | |||
Pharmaceuticals - 0.6% | |||
Medicis Pharmaceutical Corp. Class A (d) | 366,700 | 7,447,677 | |
TOTAL HEALTH CARE | 262,076,842 | ||
INDUSTRIALS - 18.0% | |||
Aerospace & Defense - 1.1% | |||
Hexcel Corp. (a)(d) | 651,900 | 14,230,977 | |
Airlines - 0.7% | |||
Delta Air Lines, Inc. (a) | 542,200 | 9,125,226 | |
Commercial Services & Supplies - 6.3% | |||
Advisory Board Co. (a) | 115,000 | 7,327,800 | |
CDI Corp. | 522,700 | 10,166,515 | |
Clean Harbors, Inc. (a) | 145,500 | 8,072,340 | |
Corrections Corp. of America (a) | 501,200 | 13,301,848 | |
CoStar Group, Inc. (a) | 181,736 | 7,694,702 | |
Huron Consulting Group, Inc. (a)(d) | 246,700 | 17,717,994 | |
InnerWorkings, Inc. (a)(d) | 650,900 | 9,014,965 | |
Navigant Consulting, Inc. (a) | 321,500 | 3,806,560 | |
The Brink's Co. | 142,100 | 8,615,523 | |
85,718,247 | |||
Construction & Engineering - 3.8% | |||
Chicago Bridge & Iron Co. NV (NY Shares) | 414,700 | 18,450,003 | |
Fluor Corp. | 96,600 | 11,753,322 | |
KBR, Inc. (a) | 362,300 | 11,445,057 | |
URS Corp. (a) | 232,025 | 10,185,898 | |
51,834,280 | |||
Electrical Equipment - 1.3% | |||
EnerSys (a) | 359,600 | 8,285,184 | |
Q-Cells AG (a)(d) | 100,600 | 9,466,274 | |
17,751,458 | |||
Industrial Conglomerates - 0.6% | |||
Raven Industries, Inc. (d) | 254,700 | 7,646,094 | |
Machinery - 2.9% | |||
Bucyrus International, Inc. Class A (d) | 169,400 | 15,705,074 | |
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Machinery - continued | |||
Flowserve Corp. | 184,033 | $ 15,112,790 | |
Hexagon AB (B Shares) | 452,600 | 8,001,028 | |
38,818,892 | |||
Road & Rail - 1.0% | |||
J.B. Hunt Transport Services, Inc. | 150,000 | 4,665,000 | |
Knight Transportation, Inc. (d) | 548,300 | 9,408,828 | |
14,073,828 | |||
Transportation Infrastructure - 0.3% | |||
Quixote Corp. | 249,600 | 4,225,728 | |
TOTAL INDUSTRIALS | 243,424,730 | ||
INFORMATION TECHNOLOGY - 22.0% | |||
Communications Equipment - 3.7% | |||
Harris Corp. | 353,700 | 19,343,853 | |
NETGEAR, Inc. (a) | 300,000 | 7,998,000 | |
Nice Systems Ltd. sponsored ADR (a) | 326,200 | 9,984,982 | |
Polycom, Inc. (a) | 488,500 | 12,334,625 | |
49,661,460 | |||
Computers & Peripherals - 0.6% | |||
Wincor Nixdorf AG | 109,200 | 8,472,312 | |
Electronic Equipment & Instruments - 1.4% | |||
Cogent, Inc. (a)(d) | 859,400 | 8,473,684 | |
Trimble Navigation Ltd. (a) | 412,600 | 10,913,270 | |
19,386,954 | |||
Internet Software & Services - 4.7% | |||
Equinix, Inc. (a)(d) | 214,100 | 16,170,973 | |
j2 Global Communications, Inc. (a)(d) | 770,400 | 16,879,464 | |
Telecity Group PLC | 1,951,500 | 9,372,018 | |
ValueClick, Inc. (a) | 622,000 | 13,578,260 | |
VistaPrint Ltd. (a) | 201,100 | 7,482,931 | |
63,483,646 | |||
IT Services - 4.0% | |||
CACI International, Inc. Class A (a) | 216,100 | 9,419,799 | |
CyberSource Corp. (a) | 867,866 | 14,536,756 | |
Datacash Group PLC | 1,661,200 | 10,158,711 | |
Satyam Computer Services Ltd. sponsored ADR (d) | 606,300 | 14,763,405 | |
WNS Holdings Ltd. ADR (a) | 334,500 | 5,823,645 | |
54,702,316 | |||
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Semiconductors & Semiconductor Equipment - 4.6% | |||
FormFactor, Inc. (a) | 358,900 | $ 8,692,558 | |
Hittite Microwave Corp. (a) | 351,821 | 14,009,512 | |
Microsemi Corp. (a)(d) | 476,800 | 10,832,896 | |
SiRF Technology Holdings, Inc. (a)(d) | 319,300 | 4,888,483 | |
Tessera Technologies, Inc. (a)(d) | 439,100 | 17,199,547 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 215,000 | 6,925,150 | |
62,548,146 | |||
Software - 3.0% | |||
Ansys, Inc. (a) | 299,500 | 10,455,545 | |
Blackbaud, Inc. | 798,259 | 22,087,827 | |
THQ, Inc. (a) | 410,000 | 7,384,100 | |
39,927,472 | |||
TOTAL INFORMATION TECHNOLOGY | 298,182,306 | ||
MATERIALS - 4.5% | |||
Metals & Mining - 4.5% | |||
Carpenter Technology Corp. | 252,700 | 15,576,428 | |
IAMGOLD Corp. | 1,187,900 | 9,469,583 | |
Reliance Steel & Aluminum Co. | 315,700 | 15,535,597 | |
Titanium Metals Corp. (d) | 548,500 | 11,924,390 | |
Yamana Gold, Inc. | 506,004 | 8,395,164 | |
60,901,162 | |||
TELECOMMUNICATION SERVICES - 0.5% | |||
Diversified Telecommunication Services - 0.5% | |||
Cbeyond, Inc. (a) | 216,000 | 7,287,840 | |
UTILITIES - 1.3% | |||
Multi-Utilities - 1.3% | |||
A2A SpA | 2,147,700 | 8,635,742 | |
CMS Energy Corp. | 607,200 | 9,514,824 | |
18,150,566 | |||
TOTAL COMMON STOCKS (Cost $1,314,226,957) | 1,319,070,362 | ||
Money Market Funds - 13.5% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 41,578,198 | $ 41,578,198 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 141,651,625 | 141,651,625 | |
TOTAL MONEY MARKET FUNDS (Cost $183,229,823) | 183,229,823 | ||
TOTAL INVESTMENT PORTFOLIO - 110.9% (Cost $1,497,456,780) | 1,502,300,185 | ||
NET OTHER ASSETS - (10.9)% | (147,976,223) | ||
NET ASSETS - 100% | $ 1,354,323,962 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,165,692 |
Fidelity Securities Lending Cash Central Fund | 251,103 |
Total | $ 1,416,795 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
Physicians Formula Holdings, Inc. | $ 5,827,585 | $ 3,948,990 | $ - | $ - | $ 6,901,487 |
Quixote Corp. | 8,618,526 | 150,375 | 3,920,750 | 75,980 | - |
Total | $ 14,446,111 | $ 4,099,365 | $ 3,920,750 | $ 75,980 | $ 6,901,487 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 86.1% |
Bermuda | 3.0% |
United Kingdom | 1.8% |
Netherlands | 1.4% |
Germany | 1.3% |
Canada | 1.3% |
India | 1.1% |
Others (individually less than 1%) | 4.0% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $139,978,566) - See accompanying schedule: Unaffiliated issuers (cost $1,303,908,585) | $ 1,312,168,875 | |
Fidelity Central Funds (cost $183,229,823) | 183,229,823 | |
Other affiliated issuers (cost $10,318,372) | 6,901,487 | |
Total Investments (cost $1,497,456,780) | $ 1,502,300,185 | |
Cash | 19 | |
Receivable for investments sold | 25,402,734 | |
Receivable for fund shares sold | 4,335,623 | |
Dividends receivable | 123,352 | |
Distributions receivable from Fidelity Central Funds | 242,715 | |
Prepaid expenses | 3,890 | |
Receivable from investment adviser for expense reductions | 2,088 | |
Other receivables | 13,636 | |
Total assets | 1,532,424,242 | |
Liabilities | ||
Payable for investments purchased | $ 33,554,357 | |
Payable for fund shares redeemed | 1,552,214 | |
Accrued management fee | 900,515 | |
Distribution fees payable | 42,096 | |
Other affiliated payables | 333,109 | |
Other payables and accrued expenses | 66,364 | |
Collateral on securities loaned, at value | 141,651,625 | |
Total liabilities | 178,100,280 | |
Net Assets | $ 1,354,323,962 | |
Net Assets consist of: | ||
Paid in capital | $ 1,354,332,960 | |
Accumulated net investment loss | (3,396,049) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,456,146) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,843,197 | |
Net Assets | $ 1,354,323,962 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 14.35 | |
Maximum offering price per share (100/94.25 of $14.35) | $ 15.23 | |
Class T: | $ 14.34 | |
Maximum offering price per share (100/96.50 of $14.34) | $ 14.86 | |
Class B: | $ 14.22 | |
Class C: | $ 14.19 | |
Small Cap Growth: | $ 14.43 | |
Institutional Class: | $ 14.43 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends (including $75,980 earned from other affiliated issuers) | $ 2,820,079 | |
Interest | 1,702 | |
Income from Fidelity Central Funds (including $251,103 from security lending) | 1,416,795 | |
Total income | 4,238,576 | |
Expenses | ||
Management fee | $ 4,702,056 | |
Performance adjustment | 560,838 | |
Transfer agent fees | 1,756,793 | |
Distribution fees | 262,148 | |
Accounting and security lending fees | 221,763 | |
Custodian fees and expenses | 17,635 | |
Independent trustees' compensation | 2,629 | |
Registration fees | 96,115 | |
Audit | 29,130 | |
Legal | 3,155 | |
Miscellaneous | 39,369 | |
Total expenses before reductions | 7,691,631 | |
Expense reductions | (57,006) | 7,634,625 |
Net investment income (loss) | (3,396,049) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 1,698,694 | |
Other affiliated issuers | (587,612) | |
Foreign currency transactions | (6,104) | |
Total net realized gain (loss) | 1,104,978 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (67,163,843) | |
Assets and liabilities in foreign currencies | 41 | |
Total change in net unrealized appreciation (depreciation) | (67,163,802) | |
Net gain (loss) | (66,058,824) | |
Net increase (decrease) in net assets resulting from operations | $ (69,454,873) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (3,396,049) | $ (4,437,632) |
Net realized gain (loss) | 1,104,978 | 87,862,892 |
Change in net unrealized appreciation (depreciation) | (67,163,802) | 65,702,764 |
Net increase (decrease) in net assets resulting | (69,454,873) | 149,128,024 |
Distributions to shareholders from net realized gain | (81,200,206) | (3,591,980) |
Share transactions - net increase (decrease) | 247,620,139 | 637,612,035 |
Redemption fees | 282,107 | 160,118 |
Total increase (decrease) in net assets | 97,247,167 | 783,308,197 |
Net Assets | ||
Beginning of period | 1,257,076,795 | 473,768,598 |
End of period (including accumulated net investment loss of $3,396,049 and $0, respectively) | $ 1,354,323,962 | $ 1,257,076,795 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.06 | $ 12.88 | $ 12.95 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.06) | (.12) H | (.10) I | (.07) |
Net realized and unrealized gain (loss) | (.63) | 3.39 | .18 | 3.01 |
Total from investment operations | (.69) | 3.27 | .08 | 2.94 |
Distributions from net realized gain | (1.02) | (.09) | (.16) | - |
Redemption fees added to paid in capital E | - L | - L | .01 | .01 |
Net asset value, end of period | $ 14.35 | $ 16.06 | $ 12.88 | $ 12.95 |
Total Return B, C, D | (4.61)% | 25.52% | .70% | 29.50% |
Ratios to Average Net Assets F, K | ||||
Expenses before reductions | 1.41% A | 1.44% | 1.53% | 1.55%A |
Expenses net of fee waivers, if any | 1.40%A | 1.40% | 1.40% | 1.45%A |
Expenses net of all reductions | 1.40%A | 1.39% | 1.35% | 1.36%A |
Net investment income (loss) | (.76)%A | (.80)%H | (.79)%I | (.78)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 38,339 | $ 33,588 | $ 18,104 | $ 4,719 |
Portfolio turnover rate G | 96%A | 91% | 129% | 93%A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.84)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.85)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.01 | $ 12.86 | $ 12.93 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.08) | (.16)H | (.14)I | (.09) |
Net realized and unrealized gain (loss) | (.63) | 3.38 | .19 | 3.01 |
Total from investment operations | (.71) | 3.22 | .05 | 2.92 |
Distributions from net realized gain | (.96) | (.07) | (.13) | - |
Redemption fees added to paid in capitalE | - L | -L | .01 | .01 |
Net asset value, end of period | $ 14.34 | $ 16.01 | $ 12.86 | $ 12.93 |
Total ReturnB, C, D | (4.72)% | 25.18% | .48% | 29.30% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 1.67%A | 1.67% | 1.73% | 1.79%A |
Expenses net of fee waivers, if any | 1.65%A | 1.65% | 1.65% | 1.70%A |
Expenses net of all reductions | 1.65%A | 1.65% | 1.60% | 1.61%A |
Net investment income (loss) | (1.01)%A | (1.05)%H | (1.04)%I | (1.03)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 23,498 | $ 26,419 | $ 19,205 | $ 5,240 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.09)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.10)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.85 | $ 12.78 | $ 12.87 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.12) | (.23)H | (.20)I | (.13) |
Net realized and unrealized gain (loss) | (.62) | 3.36 | .19 | 2.99 |
Total from investment operations | (.74) | 3.13 | (.01) | 2.86 |
Distributions from net realized gain | (.89) | (.06) | (.09) | - |
Redemption fees added to paid in capitalE | -L | -L | .01 | .01 |
Net asset value, end of period | $ 14.22 | $ 15.85 | $ 12.78 | $ 12.87 |
Total ReturnB, C, D | (4.97)% | 24.57% | (.03)% | 28.70% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 2.16%A | 2.20% | 2.28% | 2.33%A |
Expenses net of fee waivers, if any | 2.15%A | 2.15% | 2.15% | 2.20%A |
Expenses net of all reductions | 2.15%A | 2.15% | 2.10% | 2.11%A |
Net investment income (loss) | (1.51)%A | (1.55)%H | (1.54)%I | (1.53)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 6,106 | $ 6,242 | $ 5,191 | $ 2,055 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.59)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.84 | $ 12.77 | $ 12.88 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.12) | (.23)H | (.20)I | (.13) |
Net realized and unrealized gain (loss) | (.62) | 3.36 | .18 | 3.00 |
Total from investment operations | (.74) | 3.13 | (.02) | 2.87 |
Distributions from net realized gain | (.91) | (.06) | (.10) | - |
Redemption fees added to paid in capitalE | -L | -L | .01 | .01 |
Net asset value, end of period | $ 14.19 | $ 15.84 | $ 12.77 | $ 12.88 |
Total ReturnB, C, D | (4.98)% | 24.59% | (.08)% | 28.80% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 2.16%A | 2.20% | 2.25% | 2.24%A |
Expenses net of fee waivers, if any | 2.15%A | 2.15% | 2.15% | 2.17%A |
Expenses net of all reductions | 2.15%A | 2.14% | 2.10% | 2.09%A |
Net investment income (loss) | (1.51)%A | (1.55)%H | (1.54)%I | (1.50)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 22,216 | $ 22,348 | $ 14,682 | $ 8,372 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.59)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Growth
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005I | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.15 | $ 12.93 | $ 12.98 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)D | (.04) | (.08)G | (.07)H | (.04) |
Net realized and unrealized gain (loss) | (.63) | 3.40 | .19 | 3.01 |
Total from investment operations | (.67) | 3.32 | .12 | 2.97 |
Distributions from net realized gain | (1.05) | (.10) | (.18) | - |
Redemption fees added to paid in capitalD | -K | -K | .01 | .01 |
Net asset value, end of period | $ 14.43 | $ 16.15 | $ 12.93 | $ 12.98 |
Total ReturnB, C | (4.43)% | 25.84% | 1.01% | 29.80% |
Ratios to Average Net AssetsE, J | ||||
Expenses before reductions | 1.11%A | 1.10% | 1.13% | 1.16%A |
Expenses net of fee waivers, if any | 1.11%A | 1.10% | 1.13% | 1.16%A |
Expenses net of all reductions | 1.11%A | 1.09% | 1.08% | 1.08%A |
Net investment income (loss) | (.47)%A | (.50)%G | (.52)%H | (.49)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 1,241,470 | $ 1,149,809 | $ 402,353 | $ 205,652 |
Portfolio turnover rateF | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.54)%.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.58)%.
I For the period November 3, 2004 (commencement of operations) to July 31, 2005.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005I | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.15 | $ 12.92 | $ 12.97 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)D | (.03) | (.07) G | (.07) H | (.04) |
Net realized and unrealized gain (loss) | (.64) | 3.41 | .19 | 3.00 |
Total from investment operations | (.67) | 3.34 | .12 | 2.96 |
Distributions from net realized gain | (1.05) | (.11) | (.18) | - |
Redemption fees added to paid in capitalD | - K | - K | .01 | .01 |
Net asset value, end of period | $ 14.43 | $ 16.15 | $ 12.92 | $ 12.97 |
Total ReturnB, C | (4.45)% | 25.99% | .97% | 29.70% |
Ratios to Average Net AssetsE, J | ||||
Expenses before reductions | 1.03%A | 1.05% | 1.10% | 1.20%A |
Expenses net of fee waivers, if any | 1.03%A | 1.05% | 1.10% | 1.18%A |
Expenses net of all reductions | 1.03%A | 1.05% | 1.05% | 1.10%A |
Net investment income (loss) | (.39)%A | (.46)%G | (.49)%H | (.51)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 22,696 | $ 18,671 | $ 14,233 | $ 1,906 |
Portfolio turnover rateF | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.50)%.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.55)%.
I For the period November 3, 2004 (commencement of operations) to July 31, 2005.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Growth Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Small Cap Growth, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 144,310,553 |
Unrealized depreciation | (142,057,269) |
Net unrealized appreciation (depreciation) | $ 2,253,284 |
Cost for federal income tax purposes | $ 1,500,046,901 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $803,660,864 and $624,203,245, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 the retail class of the Fund, Small Cap Growth, as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .79% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 46,980 | $ 5,934 |
Class T | .25% | .25% | 65,622 | - |
Class B | .75% | .25% | 32,250 | 24,187 |
Class C | .75% | .25% | 117,296 | 22,392 |
$ 262,148 | $ 52,513 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 19,822 |
Class T | 4,228 |
Class B* | 7,091 |
Class C* | 1,524 |
$ 32,665 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for Small Cap Growth. For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 57,670 | .31 |
Class T | 41,214 | .31 |
Class B | 9,897 | .31 |
Class C | 35,879 | .31 |
Small Cap Growth | 1,595,155 | .26 |
Institutional Class | 16,978 | .18 |
$ 1,756,793 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $11,885 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,617 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.40% | $ 1,959 |
Class T | 1.65% | 1,800 |
Class B | 2.15% | 238 |
Class C | 2.15% | 816 |
$ 4,813 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $13,842 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses.
Semiannual Report
9. Expense Reductions - continued
During the period, these credits reduced the Fund's custody expenses by $3,704. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Small Cap Growth | $ 34,644 |
Institutional Class | 3 |
$ 34,647 |
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.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 2,216,913 | $ 130,212 |
Class T | 1,570,296 | 118,024 |
Class B | 348,424 | 24,691 |
Class C | 1,308,296 | 74,047 |
Small Cap Growth | 74,608,764 | 3,129,487 |
Institutional Class | 1,147,513 | 115,519 |
Total | $ 81,200,206 | $ 3,591,980 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class A | ||||
Shares sold | 821,980 | 1,113,110 | $ 12,765,692 | $ 17,060,734 |
Reinvestment of distributions | 126,731 | 8,925 | 1,912,182 | 119,928 |
Shares redeemed | (368,663) | (436,417) | (5,610,727) | (6,456,393) |
Net increase (decrease) | 580,048 | 685,618 | $ 9,067,147 | $ 10,724,269 |
Class T | ||||
Shares sold | 199,339 | 607,092 | $ 3,059,094 | $ 8,822,874 |
Reinvestment of distributions | 99,906 | 8,530 | 1,507,341 | 115,213 |
Shares redeemed | (310,797) | (459,339) | (4,715,209) | (6,905,798) |
Net increase (decrease) | (11,552) | 156,283 | $ (148,774) | $ 2,032,289 |
Class B | ||||
Shares sold | 74,756 | 121,826 | $ 1,156,276 | $ 1,800,582 |
Reinvestment of distributions | 22,166 | 1,705 | 332,232 | 23,112 |
Shares redeemed | (61,419) | (135,943) | (936,061) | (1,994,978) |
Net increase (decrease) | 35,503 | (12,412) | $ 552,447 | $ (171,284) |
Class C | ||||
Shares sold | 210,151 | 546,198 | $ 3,209,815 | $ 8,014,853 |
Reinvestment of distributions | 82,567 | 5,178 | 1,235,073 | 70,286 |
Shares redeemed | (138,075) | (290,387) | (2,062,595) | (4,244,042) |
Net increase (decrease) | 154,643 | 260,989 | $ 2,382,293 | $ 3,841,097 |
Small Cap Growth | ||||
Shares sold | 22,223,944 | 47,884,601 | $ 345,784,047 | $ 736,795,086 |
Reinvestment of distributions | 4,701,351 | 213,315 | 71,216,441 | 2,867,099 |
Shares redeemed | (12,055,856) | (8,042,099) | (187,690,484) | (119,410,062) |
Net increase (decrease) | 14,869,439 | 40,055,817 | $ 229,310,004 | $ 620,252,123 |
Institutional Class | ||||
Shares sold | 520,105 | 404,996 | $ 8,129,226 | $ 6,086,460 |
Reinvestment of distributions | 66,279 | 7,296 | 1,004,006 | 97,691 |
Shares redeemed | (170,051) | (357,460) | (2,676,210) | (5,250,610) |
Net increase (decrease) | 416,333 | 54,832 | $ 6,457,022 | $ 933,541 |
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
ASCP-USAN-0308
1.803716.104
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Small Cap Growth
Fund - Institutional Class
Semiannual Report
January 31, 2008
Institutional Class
is a class of Fidelity®
Small Cap Growth
Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 953.90 | $ 6.88 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | |||
Actual | $ 1,000.00 | $ 952.80 | $ 8.10 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | |||
Actual | $ 1,000.00 | $ 950.30 | $ 10.54 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | |||
Actual | $ 1,000.00 | $ 950.20 | $ 10.54 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Small Cap Growth | |||
Actual | $ 1,000.00 | $ 955.70 | $ 5.46 |
HypotheticalA | $ 1,000.00 | $ 1,019.56 | $ 5.63 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 955.50 | $ 5.06 |
HypotheticalA | $ 1,000.00 | $ 1,019.96 | $ 5.23 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Small Cap Growth | 1.11% |
Institutional Class | 1.03% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Blackbaud, Inc. | 1.6 | 1.2 |
Superior Energy Services, Inc. | 1.5 | 1.1 |
Harris Corp. | 1.4 | 1.5 |
Chicago Bridge & Iron Co. NV (NY Shares) | 1.4 | 0.8 |
Humana, Inc. | 1.3 | 0.9 |
Huron Consulting Group, Inc. | 1.3 | 1.2 |
Tessera Technologies, Inc. | 1.3 | 1.0 |
j2 Global Communications, Inc. | 1.3 | 1.3 |
MF Global Ltd. | 1.2 | 0.0 |
Pharmaceutical Product Development, Inc. | 1.2 | 0.9 |
13.5 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Information Technology | 22.0 | 24.4 |
Health Care | 19.4 | 16.9 |
Industrials | 18.0 | 18.0 |
Energy | 13.3 | 10.7 |
Consumer Discretionary | 8.2 | 9.3 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 97.4% | ![]() | Stocks 95.9% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 13.9% | ** Foreign | 10.2% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.4% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 8.2% | |||
Auto Components - 0.9% | |||
WABCO Holdings, Inc. | 293,600 | $ 11,829,144 | |
Diversified Consumer Services - 1.2% | |||
Apollo Group, Inc. Class A (non-vtg.) (a) | 102,200 | 8,149,428 | |
Strayer Education, Inc. | 45,000 | 7,766,100 | |
15,915,528 | |||
Hotels, Restaurants & Leisure - 1.1% | |||
Life Time Fitness, Inc. (a)(d) | 172,100 | 7,630,914 | |
Ruth's Chris Steak House, Inc. (a)(d) | 871,566 | 7,216,566 | |
14,847,480 | |||
Internet & Catalog Retail - 0.6% | |||
Priceline.com, Inc. (a) | 75,000 | 8,139,000 | |
Media - 0.6% | |||
Dolan Media Co. | 236,400 | 5,356,824 | |
New Frontier Media, Inc. | 470,565 | 2,103,426 | |
7,460,250 | |||
Specialty Retail - 2.3% | |||
Advance Auto Parts, Inc. | 239,900 | 8,559,632 | |
Citi Trends, Inc. (a) | 102,885 | 1,406,438 | |
Collective Brands, Inc. (a)(d) | 463,500 | 8,166,870 | |
The Men's Wearhouse, Inc. | 269,900 | 6,879,751 | |
Tween Brands, Inc. (a) | 210,600 | 6,745,518 | |
31,758,209 | |||
Textiles, Apparel & Luxury Goods - 1.5% | |||
American Apparel, Inc. (a)(d) | 225,700 | 2,843,820 | |
Crocs, Inc. (a)(d) | 224,800 | 7,820,792 | |
Iconix Brand Group, Inc. (a) | 489,100 | 10,168,389 | |
20,833,001 | |||
TOTAL CONSUMER DISCRETIONARY | 110,782,612 | ||
CONSUMER STAPLES - 3.6% | |||
Food Products - 1.1% | |||
Corn Products International, Inc. | 200,000 | 6,760,000 | |
Dean Foods Co. | 300,000 | 8,400,000 | |
15,160,000 | |||
Personal Products - 2.5% | |||
Bare Escentuals, Inc. (a)(d) | 449,200 | 10,708,928 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER STAPLES - continued | |||
Personal Products - continued | |||
Chattem, Inc. (a)(d) | 210,500 | $ 16,149,560 | |
Physicians Formula Holdings, Inc. (a)(e) | 728,005 | 6,901,487 | |
33,759,975 | |||
TOTAL CONSUMER STAPLES | 48,919,975 | ||
ENERGY - 13.3% | |||
Energy Equipment & Services - 4.3% | |||
Atwood Oceanics, Inc. (a) | 187,900 | 15,612,611 | |
Exterran Holdings, Inc. (a) | 115,000 | 7,502,600 | |
Grey Wolf, Inc. (a) | 1,204,300 | 7,177,628 | |
Hornbeck Offshore Services, Inc. (a)(d) | 192,200 | 7,434,296 | |
Superior Energy Services, Inc. (a) | 516,400 | 20,702,476 | |
58,429,611 | |||
Oil, Gas & Consumable Fuels - 9.0% | |||
Cabot Oil & Gas Corp. | 290,100 | 11,223,969 | |
Energy Transfer Equity LP | 222,100 | 7,331,521 | |
EXCO Resources, Inc. (a) | 533,000 | 7,989,670 | |
Forest Oil Corp. (a) | 305,033 | 13,793,592 | |
Mariner Energy, Inc. (a) | 485,710 | 12,171,893 | |
Massey Energy Co. | 341,000 | 12,678,380 | |
Petrohawk Energy Corp. (a) | 727,100 | 11,451,825 | |
Petroplus Holdings AG (a) | 80,300 | 4,944,382 | |
Range Resources Corp. | 216,350 | 11,297,797 | |
Tesoro Corp. | 375,400 | 14,659,370 | |
Western Refining, Inc. (d) | 660,700 | 14,105,945 | |
121,648,344 | |||
TOTAL ENERGY | 180,077,955 | ||
FINANCIALS - 6.6% | |||
Capital Markets - 2.0% | |||
Janus Capital Group, Inc. | 395,800 | 10,690,558 | |
MF Global Ltd. | 558,000 | 16,767,900 | |
27,458,458 | |||
Commercial Banks - 0.8% | |||
UMB Financial Corp. | 237,624 | 10,011,099 | |
Consumer Finance - 0.8% | |||
Dollar Financial Corp. (a) | 426,078 | 10,728,644 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Insurance - 2.6% | |||
Aspen Insurance Holdings Ltd. | 325,500 | $ 9,185,610 | |
National Financial Partners Corp. (d) | 284,400 | 10,266,840 | |
StanCorp Financial Group, Inc. | 173,582 | 8,541,970 | |
Willis Group Holdings Ltd. | 206,800 | 7,287,632 | |
35,282,052 | |||
Real Estate Management & Development - 0.4% | |||
CB Richard Ellis Group, Inc. Class A (a) | 298,100 | 5,786,121 | |
TOTAL FINANCIALS | 89,266,374 | ||
HEALTH CARE - 19.4% | |||
Biotechnology - 1.7% | |||
Cephalon, Inc. (a)(d) | 170,700 | 11,203,041 | |
Grifols SA | 496,802 | 12,139,322 | |
23,342,363 | |||
Health Care Equipment & Supplies - 5.4% | |||
American Medical Systems Holdings, Inc. (a)(d) | 916,400 | 13,095,356 | |
Hillenbrand Industries, Inc. | 195,800 | 10,126,776 | |
Hologic, Inc. (a)(d) | 148,000 | 9,525,280 | |
Integra LifeSciences Holdings Corp. (a)(d) | 325,100 | 13,524,160 | |
Inverness Medical Innovations, Inc. (a)(d) | 200,400 | 9,028,020 | |
Kinetic Concepts, Inc. (a)(d) | 199,100 | 9,911,198 | |
ResMed, Inc. (a)(d) | 171,800 | 8,002,444 | |
73,213,234 | |||
Health Care Providers & Services - 8.2% | |||
Healthways, Inc. (a) | 287,218 | 16,170,373 | |
Henry Schein, Inc. (a) | 238,900 | 13,887,257 | |
Humana, Inc. (a) | 222,100 | 17,834,630 | |
Patterson Companies, Inc. (a) | 351,000 | 11,246,040 | |
PSS World Medical, Inc. (a)(d) | 632,399 | 10,934,179 | |
Sun Healthcare Group, Inc. (a) | 877,900 | 15,126,217 | |
Universal American Financial Corp. (a) | 470,831 | 9,854,493 | |
VCA Antech, Inc. (a) | 408,700 | 15,800,342 | |
110,853,531 | |||
Health Care Technology - 0.5% | |||
Cerner Corp. (a) | 128,500 | 6,733,400 | |
Life Sciences Tools & Services - 3.0% | |||
Charles River Laboratories International, Inc. (a) | 158,000 | 9,811,800 | |
ICON PLC sponsored ADR (a) | 152,990 | 9,589,413 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Life Sciences Tools & Services - continued | |||
PAREXEL International Corp. (a) | 80,000 | $ 4,352,800 | |
Pharmaceutical Product Development, Inc. | 385,900 | 16,732,624 | |
40,486,637 | |||
Pharmaceuticals - 0.6% | |||
Medicis Pharmaceutical Corp. Class A (d) | 366,700 | 7,447,677 | |
TOTAL HEALTH CARE | 262,076,842 | ||
INDUSTRIALS - 18.0% | |||
Aerospace & Defense - 1.1% | |||
Hexcel Corp. (a)(d) | 651,900 | 14,230,977 | |
Airlines - 0.7% | |||
Delta Air Lines, Inc. (a) | 542,200 | 9,125,226 | |
Commercial Services & Supplies - 6.3% | |||
Advisory Board Co. (a) | 115,000 | 7,327,800 | |
CDI Corp. | 522,700 | 10,166,515 | |
Clean Harbors, Inc. (a) | 145,500 | 8,072,340 | |
Corrections Corp. of America (a) | 501,200 | 13,301,848 | |
CoStar Group, Inc. (a) | 181,736 | 7,694,702 | |
Huron Consulting Group, Inc. (a)(d) | 246,700 | 17,717,994 | |
InnerWorkings, Inc. (a)(d) | 650,900 | 9,014,965 | |
Navigant Consulting, Inc. (a) | 321,500 | 3,806,560 | |
The Brink's Co. | 142,100 | 8,615,523 | |
85,718,247 | |||
Construction & Engineering - 3.8% | |||
Chicago Bridge & Iron Co. NV (NY Shares) | 414,700 | 18,450,003 | |
Fluor Corp. | 96,600 | 11,753,322 | |
KBR, Inc. (a) | 362,300 | 11,445,057 | |
URS Corp. (a) | 232,025 | 10,185,898 | |
51,834,280 | |||
Electrical Equipment - 1.3% | |||
EnerSys (a) | 359,600 | 8,285,184 | |
Q-Cells AG (a)(d) | 100,600 | 9,466,274 | |
17,751,458 | |||
Industrial Conglomerates - 0.6% | |||
Raven Industries, Inc. (d) | 254,700 | 7,646,094 | |
Machinery - 2.9% | |||
Bucyrus International, Inc. Class A (d) | 169,400 | 15,705,074 | |
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Machinery - continued | |||
Flowserve Corp. | 184,033 | $ 15,112,790 | |
Hexagon AB (B Shares) | 452,600 | 8,001,028 | |
38,818,892 | |||
Road & Rail - 1.0% | |||
J.B. Hunt Transport Services, Inc. | 150,000 | 4,665,000 | |
Knight Transportation, Inc. (d) | 548,300 | 9,408,828 | |
14,073,828 | |||
Transportation Infrastructure - 0.3% | |||
Quixote Corp. | 249,600 | 4,225,728 | |
TOTAL INDUSTRIALS | 243,424,730 | ||
INFORMATION TECHNOLOGY - 22.0% | |||
Communications Equipment - 3.7% | |||
Harris Corp. | 353,700 | 19,343,853 | |
NETGEAR, Inc. (a) | 300,000 | 7,998,000 | |
Nice Systems Ltd. sponsored ADR (a) | 326,200 | 9,984,982 | |
Polycom, Inc. (a) | 488,500 | 12,334,625 | |
49,661,460 | |||
Computers & Peripherals - 0.6% | |||
Wincor Nixdorf AG | 109,200 | 8,472,312 | |
Electronic Equipment & Instruments - 1.4% | |||
Cogent, Inc. (a)(d) | 859,400 | 8,473,684 | |
Trimble Navigation Ltd. (a) | 412,600 | 10,913,270 | |
19,386,954 | |||
Internet Software & Services - 4.7% | |||
Equinix, Inc. (a)(d) | 214,100 | 16,170,973 | |
j2 Global Communications, Inc. (a)(d) | 770,400 | 16,879,464 | |
Telecity Group PLC | 1,951,500 | 9,372,018 | |
ValueClick, Inc. (a) | 622,000 | 13,578,260 | |
VistaPrint Ltd. (a) | 201,100 | 7,482,931 | |
63,483,646 | |||
IT Services - 4.0% | |||
CACI International, Inc. Class A (a) | 216,100 | 9,419,799 | |
CyberSource Corp. (a) | 867,866 | 14,536,756 | |
Datacash Group PLC | 1,661,200 | 10,158,711 | |
Satyam Computer Services Ltd. sponsored ADR (d) | 606,300 | 14,763,405 | |
WNS Holdings Ltd. ADR (a) | 334,500 | 5,823,645 | |
54,702,316 | |||
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Semiconductors & Semiconductor Equipment - 4.6% | |||
FormFactor, Inc. (a) | 358,900 | $ 8,692,558 | |
Hittite Microwave Corp. (a) | 351,821 | 14,009,512 | |
Microsemi Corp. (a)(d) | 476,800 | 10,832,896 | |
SiRF Technology Holdings, Inc. (a)(d) | 319,300 | 4,888,483 | |
Tessera Technologies, Inc. (a)(d) | 439,100 | 17,199,547 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 215,000 | 6,925,150 | |
62,548,146 | |||
Software - 3.0% | |||
Ansys, Inc. (a) | 299,500 | 10,455,545 | |
Blackbaud, Inc. | 798,259 | 22,087,827 | |
THQ, Inc. (a) | 410,000 | 7,384,100 | |
39,927,472 | |||
TOTAL INFORMATION TECHNOLOGY | 298,182,306 | ||
MATERIALS - 4.5% | |||
Metals & Mining - 4.5% | |||
Carpenter Technology Corp. | 252,700 | 15,576,428 | |
IAMGOLD Corp. | 1,187,900 | 9,469,583 | |
Reliance Steel & Aluminum Co. | 315,700 | 15,535,597 | |
Titanium Metals Corp. (d) | 548,500 | 11,924,390 | |
Yamana Gold, Inc. | 506,004 | 8,395,164 | |
60,901,162 | |||
TELECOMMUNICATION SERVICES - 0.5% | |||
Diversified Telecommunication Services - 0.5% | |||
Cbeyond, Inc. (a) | 216,000 | 7,287,840 | |
UTILITIES - 1.3% | |||
Multi-Utilities - 1.3% | |||
A2A SpA | 2,147,700 | 8,635,742 | |
CMS Energy Corp. | 607,200 | 9,514,824 | |
18,150,566 | |||
TOTAL COMMON STOCKS (Cost $1,314,226,957) | 1,319,070,362 | ||
Money Market Funds - 13.5% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 41,578,198 | $ 41,578,198 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 141,651,625 | 141,651,625 | |
TOTAL MONEY MARKET FUNDS (Cost $183,229,823) | 183,229,823 | ||
TOTAL INVESTMENT PORTFOLIO - 110.9% (Cost $1,497,456,780) | 1,502,300,185 | ||
NET OTHER ASSETS - (10.9)% | (147,976,223) | ||
NET ASSETS - 100% | $ 1,354,323,962 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,165,692 |
Fidelity Securities Lending Cash Central Fund | 251,103 |
Total | $ 1,416,795 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
Physicians Formula Holdings, Inc. | $ 5,827,585 | $ 3,948,990 | $ - | $ - | $ 6,901,487 |
Quixote Corp. | 8,618,526 | 150,375 | 3,920,750 | 75,980 | - |
Total | $ 14,446,111 | $ 4,099,365 | $ 3,920,750 | $ 75,980 | $ 6,901,487 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 86.1% |
Bermuda | 3.0% |
United Kingdom | 1.8% |
Netherlands | 1.4% |
Germany | 1.3% |
Canada | 1.3% |
India | 1.1% |
Others (individually less than 1%) | 4.0% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $139,978,566) - See accompanying schedule: Unaffiliated issuers (cost $1,303,908,585) | $ 1,312,168,875 | |
Fidelity Central Funds (cost $183,229,823) | 183,229,823 | |
Other affiliated issuers (cost $10,318,372) | 6,901,487 | |
Total Investments (cost $1,497,456,780) | $ 1,502,300,185 | |
Cash | 19 | |
Receivable for investments sold | 25,402,734 | |
Receivable for fund shares sold | 4,335,623 | |
Dividends receivable | 123,352 | |
Distributions receivable from Fidelity Central Funds | 242,715 | |
Prepaid expenses | 3,890 | |
Receivable from investment adviser for expense reductions | 2,088 | |
Other receivables | 13,636 | |
Total assets | 1,532,424,242 | |
Liabilities | ||
Payable for investments purchased | $ 33,554,357 | |
Payable for fund shares redeemed | 1,552,214 | |
Accrued management fee | 900,515 | |
Distribution fees payable | 42,096 | |
Other affiliated payables | 333,109 | |
Other payables and accrued expenses | 66,364 | |
Collateral on securities loaned, at value | 141,651,625 | |
Total liabilities | 178,100,280 | |
Net Assets | $ 1,354,323,962 | |
Net Assets consist of: | ||
Paid in capital | $ 1,354,332,960 | |
Accumulated net investment loss | (3,396,049) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,456,146) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,843,197 | |
Net Assets | $ 1,354,323,962 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 14.35 | |
Maximum offering price per share (100/94.25 of $14.35) | $ 15.23 | |
Class T: | $ 14.34 | |
Maximum offering price per share (100/96.50 of $14.34) | $ 14.86 | |
Class B: | $ 14.22 | |
Class C: | $ 14.19 | |
Small Cap Growth: | $ 14.43 | |
Institutional Class: | $ 14.43 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends (including $75,980 earned from other affiliated issuers) | $ 2,820,079 | |
Interest | 1,702 | |
Income from Fidelity Central Funds (including $251,103 from security lending) | 1,416,795 | |
Total income | 4,238,576 | |
Expenses | ||
Management fee | $ 4,702,056 | |
Performance adjustment | 560,838 | |
Transfer agent fees | 1,756,793 | |
Distribution fees | 262,148 | |
Accounting and security lending fees | 221,763 | |
Custodian fees and expenses | 17,635 | |
Independent trustees' compensation | 2,629 | |
Registration fees | 96,115 | |
Audit | 29,130 | |
Legal | 3,155 | |
Miscellaneous | 39,369 | |
Total expenses before reductions | 7,691,631 | |
Expense reductions | (57,006) | 7,634,625 |
Net investment income (loss) | (3,396,049) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 1,698,694 | |
Other affiliated issuers | (587,612) | |
Foreign currency transactions | (6,104) | |
Total net realized gain (loss) | 1,104,978 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (67,163,843) | |
Assets and liabilities in foreign currencies | 41 | |
Total change in net unrealized appreciation (depreciation) | (67,163,802) | |
Net gain (loss) | (66,058,824) | |
Net increase (decrease) in net assets resulting from operations | $ (69,454,873) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (3,396,049) | $ (4,437,632) |
Net realized gain (loss) | 1,104,978 | 87,862,892 |
Change in net unrealized appreciation (depreciation) | (67,163,802) | 65,702,764 |
Net increase (decrease) in net assets resulting | (69,454,873) | 149,128,024 |
Distributions to shareholders from net realized gain | (81,200,206) | (3,591,980) |
Share transactions - net increase (decrease) | 247,620,139 | 637,612,035 |
Redemption fees | 282,107 | 160,118 |
Total increase (decrease) in net assets | 97,247,167 | 783,308,197 |
Net Assets | ||
Beginning of period | 1,257,076,795 | 473,768,598 |
End of period (including accumulated net investment loss of $3,396,049 and $0, respectively) | $ 1,354,323,962 | $ 1,257,076,795 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.06 | $ 12.88 | $ 12.95 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.06) | (.12) H | (.10) I | (.07) |
Net realized and unrealized gain (loss) | (.63) | 3.39 | .18 | 3.01 |
Total from investment operations | (.69) | 3.27 | .08 | 2.94 |
Distributions from net realized gain | (1.02) | (.09) | (.16) | - |
Redemption fees added to paid in capital E | - L | - L | .01 | .01 |
Net asset value, end of period | $ 14.35 | $ 16.06 | $ 12.88 | $ 12.95 |
Total Return B, C, D | (4.61)% | 25.52% | .70% | 29.50% |
Ratios to Average Net Assets F, K | ||||
Expenses before reductions | 1.41% A | 1.44% | 1.53% | 1.55%A |
Expenses net of fee waivers, if any | 1.40%A | 1.40% | 1.40% | 1.45%A |
Expenses net of all reductions | 1.40%A | 1.39% | 1.35% | 1.36%A |
Net investment income (loss) | (.76)%A | (.80)%H | (.79)%I | (.78)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 38,339 | $ 33,588 | $ 18,104 | $ 4,719 |
Portfolio turnover rate G | 96%A | 91% | 129% | 93%A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.84)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.85)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.01 | $ 12.86 | $ 12.93 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.08) | (.16)H | (.14)I | (.09) |
Net realized and unrealized gain (loss) | (.63) | 3.38 | .19 | 3.01 |
Total from investment operations | (.71) | 3.22 | .05 | 2.92 |
Distributions from net realized gain | (.96) | (.07) | (.13) | - |
Redemption fees added to paid in capitalE | - L | -L | .01 | .01 |
Net asset value, end of period | $ 14.34 | $ 16.01 | $ 12.86 | $ 12.93 |
Total ReturnB, C, D | (4.72)% | 25.18% | .48% | 29.30% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 1.67%A | 1.67% | 1.73% | 1.79%A |
Expenses net of fee waivers, if any | 1.65%A | 1.65% | 1.65% | 1.70%A |
Expenses net of all reductions | 1.65%A | 1.65% | 1.60% | 1.61%A |
Net investment income (loss) | (1.01)%A | (1.05)%H | (1.04)%I | (1.03)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 23,498 | $ 26,419 | $ 19,205 | $ 5,240 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.09)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.10)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.85 | $ 12.78 | $ 12.87 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.12) | (.23)H | (.20)I | (.13) |
Net realized and unrealized gain (loss) | (.62) | 3.36 | .19 | 2.99 |
Total from investment operations | (.74) | 3.13 | (.01) | 2.86 |
Distributions from net realized gain | (.89) | (.06) | (.09) | - |
Redemption fees added to paid in capitalE | -L | -L | .01 | .01 |
Net asset value, end of period | $ 14.22 | $ 15.85 | $ 12.78 | $ 12.87 |
Total ReturnB, C, D | (4.97)% | 24.57% | (.03)% | 28.70% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 2.16%A | 2.20% | 2.28% | 2.33%A |
Expenses net of fee waivers, if any | 2.15%A | 2.15% | 2.15% | 2.20%A |
Expenses net of all reductions | 2.15%A | 2.15% | 2.10% | 2.11%A |
Net investment income (loss) | (1.51)%A | (1.55)%H | (1.54)%I | (1.53)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 6,106 | $ 6,242 | $ 5,191 | $ 2,055 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.59)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005J | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 15.84 | $ 12.77 | $ 12.88 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)E | (.12) | (.23)H | (.20)I | (.13) |
Net realized and unrealized gain (loss) | (.62) | 3.36 | .18 | 3.00 |
Total from investment operations | (.74) | 3.13 | (.02) | 2.87 |
Distributions from net realized gain | (.91) | (.06) | (.10) | - |
Redemption fees added to paid in capitalE | -L | -L | .01 | .01 |
Net asset value, end of period | $ 14.19 | $ 15.84 | $ 12.77 | $ 12.88 |
Total ReturnB, C, D | (4.98)% | 24.59% | (.08)% | 28.80% |
Ratios to Average Net AssetsF, K | ||||
Expenses before reductions | 2.16%A | 2.20% | 2.25% | 2.24%A |
Expenses net of fee waivers, if any | 2.15%A | 2.15% | 2.15% | 2.17%A |
Expenses net of all reductions | 2.15%A | 2.14% | 2.10% | 2.09%A |
Net investment income (loss) | (1.51)%A | (1.55)%H | (1.54)%I | (1.50)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 22,216 | $ 22,348 | $ 14,682 | $ 8,372 |
Portfolio turnover rateG | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.59)%.
I Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%.
J For the period November 3, 2004 (commencement of operations) to July 31, 2005.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Growth
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005I | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.15 | $ 12.93 | $ 12.98 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)D | (.04) | (.08)G | (.07)H | (.04) |
Net realized and unrealized gain (loss) | (.63) | 3.40 | .19 | 3.01 |
Total from investment operations | (.67) | 3.32 | .12 | 2.97 |
Distributions from net realized gain | (1.05) | (.10) | (.18) | - |
Redemption fees added to paid in capitalD | -K | -K | .01 | .01 |
Net asset value, end of period | $ 14.43 | $ 16.15 | $ 12.93 | $ 12.98 |
Total ReturnB, C | (4.43)% | 25.84% | 1.01% | 29.80% |
Ratios to Average Net AssetsE, J | ||||
Expenses before reductions | 1.11%A | 1.10% | 1.13% | 1.16%A |
Expenses net of fee waivers, if any | 1.11%A | 1.10% | 1.13% | 1.16%A |
Expenses net of all reductions | 1.11%A | 1.09% | 1.08% | 1.08%A |
Net investment income (loss) | (.47)%A | (.50)%G | (.52)%H | (.49)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 1,241,470 | $ 1,149,809 | $ 402,353 | $ 205,652 |
Portfolio turnover rateF | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.54)%.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.58)%.
I For the period November 3, 2004 (commencement of operations) to July 31, 2005.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005I | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 16.15 | $ 12.92 | $ 12.97 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss)D | (.03) | (.07) G | (.07) H | (.04) |
Net realized and unrealized gain (loss) | (.64) | 3.41 | .19 | 3.00 |
Total from investment operations | (.67) | 3.34 | .12 | 2.96 |
Distributions from net realized gain | (1.05) | (.11) | (.18) | - |
Redemption fees added to paid in capitalD | - K | - K | .01 | .01 |
Net asset value, end of period | $ 14.43 | $ 16.15 | $ 12.92 | $ 12.97 |
Total ReturnB, C | (4.45)% | 25.99% | .97% | 29.70% |
Ratios to Average Net AssetsE, J | ||||
Expenses before reductions | 1.03%A | 1.05% | 1.10% | 1.20%A |
Expenses net of fee waivers, if any | 1.03%A | 1.05% | 1.10% | 1.18%A |
Expenses net of all reductions | 1.03%A | 1.05% | 1.05% | 1.10%A |
Net investment income (loss) | (.39)%A | (.46)%G | (.49)%H | (.51)%A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 22,696 | $ 18,671 | $ 14,233 | $ 1,906 |
Portfolio turnover rateF | 96%A | 91% | 129% | 93%A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.50)%.
H Investment income per share reflects a special dividend which amounted to $.01 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.55)%.
I For the period November 3, 2004 (commencement of operations) to July 31, 2005.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Growth Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Small Cap Growth, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 144,310,553 |
Unrealized depreciation | (142,057,269) |
Net unrealized appreciation (depreciation) | $ 2,253,284 |
Cost for federal income tax purposes | $ 1,500,046,901 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by
Semiannual Report
4. Operating Policies - continued
Repurchase Agreements - continued
government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $803,660,864 and $624,203,245, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 the retail class of the Fund, Small Cap Growth, as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .79% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 46,980 | $ 5,934 |
Class T | .25% | .25% | 65,622 | - |
Class B | .75% | .25% | 32,250 | 24,187 |
Class C | .75% | .25% | 117,296 | 22,392 |
$ 262,148 | $ 52,513 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 19,822 |
Class T | 4,228 |
Class B* | 7,091 |
Class C* | 1,524 |
$ 32,665 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for Small Cap Growth. For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 57,670 | .31 |
Class T | 41,214 | .31 |
Class B | 9,897 | .31 |
Class C | 35,879 | .31 |
Small Cap Growth | 1,595,155 | .26 |
Institutional Class | 16,978 | .18 |
$ 1,756,793 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $11,885 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,617 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.40% | $ 1,959 |
Class T | 1.65% | 1,800 |
Class B | 2.15% | 238 |
Class C | 2.15% | 816 |
$ 4,813 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $13,842 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses.
Semiannual Report
9. Expense Reductions - continued
During the period, these credits reduced the Fund's custody expenses by $3,704. During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Small Cap Growth | $ 34,644 |
Institutional Class | 3 |
$ 34,647 |
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.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 2,216,913 | $ 130,212 |
Class T | 1,570,296 | 118,024 |
Class B | 348,424 | 24,691 |
Class C | 1,308,296 | 74,047 |
Small Cap Growth | 74,608,764 | 3,129,487 |
Institutional Class | 1,147,513 | 115,519 |
Total | $ 81,200,206 | $ 3,591,980 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended | Year ended | Six months ended | Year ended | |
Class A | ||||
Shares sold | 821,980 | 1,113,110 | $ 12,765,692 | $ 17,060,734 |
Reinvestment of distributions | 126,731 | 8,925 | 1,912,182 | 119,928 |
Shares redeemed | (368,663) | (436,417) | (5,610,727) | (6,456,393) |
Net increase (decrease) | 580,048 | 685,618 | $ 9,067,147 | $ 10,724,269 |
Class T | ||||
Shares sold | 199,339 | 607,092 | $ 3,059,094 | $ 8,822,874 |
Reinvestment of distributions | 99,906 | 8,530 | 1,507,341 | 115,213 |
Shares redeemed | (310,797) | (459,339) | (4,715,209) | (6,905,798) |
Net increase (decrease) | (11,552) | 156,283 | $ (148,774) | $ 2,032,289 |
Class B | ||||
Shares sold | 74,756 | 121,826 | $ 1,156,276 | $ 1,800,582 |
Reinvestment of distributions | 22,166 | 1,705 | 332,232 | 23,112 |
Shares redeemed | (61,419) | (135,943) | (936,061) | (1,994,978) |
Net increase (decrease) | 35,503 | (12,412) | $ 552,447 | $ (171,284) |
Class C | ||||
Shares sold | 210,151 | 546,198 | $ 3,209,815 | $ 8,014,853 |
Reinvestment of distributions | 82,567 | 5,178 | 1,235,073 | 70,286 |
Shares redeemed | (138,075) | (290,387) | (2,062,595) | (4,244,042) |
Net increase (decrease) | 154,643 | 260,989 | $ 2,382,293 | $ 3,841,097 |
Small Cap Growth | ||||
Shares sold | 22,223,944 | 47,884,601 | $ 345,784,047 | $ 736,795,086 |
Reinvestment of distributions | 4,701,351 | 213,315 | 71,216,441 | 2,867,099 |
Shares redeemed | (12,055,856) | (8,042,099) | (187,690,484) | (119,410,062) |
Net increase (decrease) | 14,869,439 | 40,055,817 | $ 229,310,004 | $ 620,252,123 |
Institutional Class | ||||
Shares sold | 520,105 | 404,996 | $ 8,129,226 | $ 6,086,460 |
Reinvestment of distributions | 66,279 | 7,296 | 1,004,006 | 97,691 |
Shares redeemed | (170,051) | (357,460) | (2,676,210) | (5,250,610) |
Net increase (decrease) | 416,333 | 54,832 | $ 6,457,022 | $ 933,541 |
Semiannual Report
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Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
ASCPI-USAN-0308
1.803724.104
(Fidelity Investment logo)(registered trademark)
Fidelity®
Small Cap Opportunities
Fund
Semiannual Report
January 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 888.30 | $ 4.65 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.21 | $ 4.98 |
* Expenses are equal to the Fund's annualized expense ratio of .98%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Blackbaud, Inc. | 1.6 | 2.1 |
Healthways, Inc. | 1.4 | 0.6 |
j2 Global Communications, Inc. | 1.2 | 2.0 |
Hillenbrand Industries, Inc. | 1.1 | 0.0 |
VistaPrint Ltd. | 1.1 | 0.3 |
Aftermarket Technology Corp. | 1.0 | 0.8 |
Randgold Resources Ltd. sponsored ADR | 1.0 | 0.0 |
Air Methods Corp. | 1.0 | 1.2 |
THQ, Inc. | 0.9 | 0.0 |
eTelecare Global Solutions, Inc. ADR | 0.9 | 0.4 |
11.2 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Information Technology | 18.9 | 18.5 |
Financials | 16.8 | 18.2 |
Consumer Discretionary | 14.4 | 15.6 |
Health Care | 13.8 | 11.1 |
Industrials | 12.2 | 14.0 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008* | As of July 31, 2007** | ||||||
![]() | Stocks and | ![]() | Stocks and | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 11.1% | ** Foreign investments | 6.5% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 94.7% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 14.4% | |||
Auto Components - 1.7% | |||
Aftermarket Technology Corp. (a) | 524,700 | $ 13,332,627 | |
Amerigon, Inc. (a) | 504,833 | 8,642,741 | |
21,975,368 | |||
Distributors - 0.4% | |||
DXP Enterprises, Inc. (a) | 136,500 | 4,982,250 | |
Diversified Consumer Services - 1.0% | |||
DeVry, Inc. | 121,800 | 6,722,142 | |
Regis Corp. | 224,500 | 5,686,585 | |
12,408,727 | |||
Hotels, Restaurants & Leisure - 1.8% | |||
Denny's Corp. (a) | 1,737,500 | 5,890,125 | |
Life Time Fitness, Inc. (a)(d) | 245,300 | 10,876,602 | |
Town Sports International Holdings, Inc. (a) | 664,300 | 5,779,410 | |
22,546,137 | |||
Household Durables - 1.3% | |||
Helen of Troy Ltd. (a) | 226,300 | 3,847,100 | |
Jarden Corp. (a) | 270,600 | 6,775,824 | |
Universal Electronics, Inc. (a) | 222,500 | 5,297,725 | |
15,920,649 | |||
Leisure Equipment & Products - 1.3% | |||
Callaway Golf Co. | 481,600 | 8,630,272 | |
Nautilus, Inc. (d) | 1,254,000 | 5,831,100 | |
Summer Infant, Inc. (a) | 480,005 | 2,112,022 | |
16,573,394 | |||
Media - 1.4% | |||
Dolan Media Co. | 210,200 | 4,763,132 | |
Regal Entertainment Group Class A | 344,400 | 6,385,176 | |
TiVo, Inc. (a)(d) | 706,600 | 6,196,882 | |
17,345,190 | |||
Multiline Retail - 0.1% | |||
The Bon-Ton Stores, Inc. | 128,800 | 998,200 | |
Specialty Retail - 2.4% | |||
Collective Brands, Inc. (a)(d) | 368,400 | 6,491,208 | |
Guess?, Inc. | 169,800 | 6,335,238 | |
Jos. A. Bank Clothiers, Inc. (a)(d) | 88,418 | 2,408,506 | |
Shoe Carnival, Inc. (a) | 239,377 | 3,537,992 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
Stein Mart, Inc. | 149,100 | $ 952,749 | |
The Men's Wearhouse, Inc. (d) | 391,000 | 9,966,590 | |
29,692,283 | |||
Textiles, Apparel & Luxury Goods - 3.0% | |||
American Apparel, Inc. (a)(d) | 617,600 | 7,781,760 | |
Crocs, Inc. (a)(d) | 214,000 | 7,445,060 | |
FGX International Ltd. | 461,900 | 4,665,190 | |
Iconix Brand Group, Inc. (a) | 398,100 | 8,276,499 | |
True Religion Apparel, Inc. (a)(d) | 547,900 | 10,218,335 | |
38,386,844 | |||
TOTAL CONSUMER DISCRETIONARY | 180,829,042 | ||
CONSUMER STAPLES - 2.9% | |||
Food & Staples Retailing - 0.9% | |||
Nash-Finch Co. | 108,200 | 3,860,576 | |
The Great Atlantic & Pacific Tea Co. (a)(d) | 230,400 | 6,882,048 | |
10,742,624 | |||
Food Products - 0.3% | |||
Corn Products International, Inc. | 111,800 | 3,778,840 | |
Personal Products - 1.7% | |||
Bare Escentuals, Inc. (a)(d) | 343,100 | 8,179,504 | |
Chattem, Inc. (a) | 127,590 | 9,788,705 | |
Physicians Formula Holdings, Inc. (a) | 342,566 | 3,247,526 | |
21,215,735 | |||
TOTAL CONSUMER STAPLES | 35,737,199 | ||
ENERGY - 7.1% | |||
Energy Equipment & Services - 2.6% | |||
Dril-Quip, Inc. (a) | 100,600 | 4,883,124 | |
ENGlobal Corp. (a)(d) | 301,105 | 2,902,652 | |
Exterran Holdings, Inc. (a) | 96,352 | 6,286,004 | |
NATCO Group, Inc. Class A (a) | 176,600 | 8,084,748 | |
Superior Energy Services, Inc. (a) | 269,250 | 10,794,233 | |
32,950,761 | |||
Oil, Gas & Consumable Fuels - 4.5% | |||
Banpu PCL unit | 358,900 | 4,694,060 | |
Concho Resources, Inc. | 375,400 | 7,620,620 | |
Common Stocks - continued | |||
Shares | Value | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
EXCO Resources, Inc. (a)(d) | 767,400 | $ 11,503,326 | |
Kodiak Oil & Gas Corp. (a) | 1,383,100 | 2,863,017 | |
Mariner Energy, Inc. (a) | 261,300 | 6,548,178 | |
Petrohawk Energy Corp. (a) | 447,440 | 7,047,180 | |
Straits Asia Resources Ltd. | 3,673,000 | 8,787,205 | |
Western Refining, Inc. | 217,300 | 4,639,355 | |
World Fuel Services Corp. | 100,100 | 2,648,646 | |
56,351,587 | |||
TOTAL ENERGY | 89,302,348 | ||
FINANCIALS - 16.8% | |||
Capital Markets - 1.9% | |||
Affiliated Managers Group, Inc. (a)(d) | 26,400 | 2,595,384 | |
GFI Group, Inc. (a) | 89,400 | 7,885,974 | |
Janus Capital Group, Inc. | 154,900 | 4,183,849 | |
MF Global Ltd. | 284,100 | 8,537,205 | |
23,202,412 | |||
Commercial Banks - 5.6% | |||
Alabama National Bancorp, Delaware | 29,300 | 2,292,725 | |
Associated Banc-Corp. | 276,600 | 7,794,588 | |
Capitol Bancorp Ltd. | 31,400 | 653,748 | |
Center Financial Corp., California | 347,700 | 4,026,366 | |
Central Pacific Financial Corp. | 31,200 | 592,800 | |
Citizens Banking Corp., Michigan | 76,000 | 1,074,640 | |
Columbia Banking Systems, Inc. | 216,500 | 5,566,215 | |
Community Bank System, Inc. | 29,800 | 650,236 | |
CVB Financial Corp. (d) | 120,800 | 1,346,920 | |
First Community Bancorp, California | 116,470 | 4,138,179 | |
First Merchants Corp. | 91,600 | 2,473,200 | |
First Midwest Bancorp, Inc., Delaware (d) | 43,700 | 1,363,440 | |
First State Bancorp. | 51,500 | 646,840 | |
FirstMerit Corp. | 56,000 | 1,252,720 | |
FNB Corp., Pennsylvania | 83,400 | 1,298,538 | |
Hanmi Financial Corp. | 40,000 | 344,000 | |
IBERIABANK Corp. | 10,900 | 560,369 | |
Intervest Bancshares Corp. Class A (e) | 386,340 | 5,791,237 | |
NBT Bancorp, Inc. | 58,000 | 1,309,640 | |
Prosperity Bancshares, Inc. (d) | 186,100 | 5,350,375 | |
Renasant Corp. | 245,900 | 5,156,523 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Commercial Banks - continued | |||
Sterling Bancorp, New York | 22,600 | $ 323,406 | |
Sterling Bancshares, Inc. | 361,700 | 3,627,851 | |
Sterling Financial Corp., Washington | 116,200 | 2,067,198 | |
Taylor Capital Group, Inc. | 4,200 | 82,278 | |
UMB Financial Corp. | 114,800 | 4,836,524 | |
Umpqua Holdings Corp. | 62,100 | 1,018,440 | |
Univest Corp. of Pennsylvania (d) | 23,600 | 613,600 | |
WesBanco, Inc. | 24,900 | 683,754 | |
West Coast Bancorp, Oregon | 45,500 | 691,600 | |
Westamerica Bancorp. (d) | 27,100 | 1,341,992 | |
Western Alliance Bancorp. (a)(d) | 65,000 | 1,043,250 | |
Wilshire Bancorp, Inc. | 94,100 | 741,508 | |
70,754,700 | |||
Consumer Finance - 0.7% | |||
Cash America International, Inc. | 79,700 | 2,591,047 | |
Dollar Financial Corp. (a) | 243,840 | 6,139,891 | |
8,730,938 | |||
Diversified Financial Services - 0.4% | |||
JSE Ltd. | 492,000 | 4,590,158 | |
Insurance - 3.0% | |||
Affirmative Insurance Holdings, Inc. | 192,700 | 1,755,497 | |
Allied World Assurance Co. Holdings Ltd. | 95,700 | 4,558,191 | |
American Safety Insurance Group Ltd. (a) | 470,400 | 8,937,600 | |
Aspen Insurance Holdings Ltd. | 117,000 | 3,301,740 | |
Assurant, Inc. | 73,500 | 4,769,415 | |
IPC Holdings Ltd. | 176,300 | 4,536,199 | |
Max Capital Group Ltd. | 122,900 | 3,489,131 | |
Stewart Information Services Corp. | 6,420 | 219,757 | |
United America Indemnity Ltd. Class A (a) | 314,522 | 6,450,846 | |
38,018,376 | |||
Real Estate Investment Trusts - 3.9% | |||
Alexandria Real Estate Equities, Inc. | 73,500 | 7,219,905 | |
AMB Property Corp. (SBI) (d) | 162,900 | 8,242,740 | |
Annaly Capital Management, Inc. | 306,700 | 6,048,124 | |
Digital Realty Trust, Inc. | 162,100 | 5,791,833 | |
MFA Mortgage Investments, Inc. | 185,300 | 1,890,060 | |
National Retail Properties, Inc. | 411,400 | 9,347,008 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Real Estate Investment Trusts - continued | |||
ProLogis Trust | 120,200 | $ 7,133,870 | |
Taubman Centers, Inc. | 72,900 | 3,655,935 | |
49,329,475 | |||
Thrifts & Mortgage Finance - 1.3% | |||
Downey Financial Corp. (d) | 58,200 | 2,007,900 | |
Encore Bancshares, Inc. | 123,800 | 2,353,438 | |
PFF Bancorp, Inc. | 120,900 | 1,512,459 | |
Washington Federal, Inc. | 421,900 | 10,302,798 | |
16,176,595 | |||
TOTAL FINANCIALS | 210,802,654 | ||
HEALTH CARE - 13.8% | |||
Biotechnology - 2.1% | |||
Alexion Pharmaceuticals, Inc. (a) | 112,300 | 7,335,436 | |
Indevus Pharmaceuticals, Inc. (a) | 1,032,400 | 6,576,388 | |
ONYX Pharmaceuticals, Inc. (a) | 139,600 | 6,635,188 | |
Theravance, Inc. (a) | 255,800 | 5,046,934 | |
25,593,946 | |||
Health Care Equipment & Supplies - 3.5% | |||
Hillenbrand Industries, Inc. | 273,000 | 14,119,560 | |
Masimo Corp. | 175,000 | 6,245,750 | |
Meridian Bioscience, Inc. | 280,000 | 8,794,800 | |
Quidel Corp. (a) | 362,000 | 5,708,740 | |
Zoll Medical Corp. (a) | 351,840 | 9,380,054 | |
44,248,904 | |||
Health Care Providers & Services - 4.7% | |||
Air Methods Corp. (a) | 267,025 | 12,251,107 | |
Emergency Medical Services Corp. Class A (a)(d) | 280,700 | 8,637,139 | |
Genoptix, Inc. | 219,400 | 8,163,874 | |
Healthways, Inc. (a) | 312,500 | 17,593,750 | |
Pediatrix Medical Group, Inc. (a) | 162,800 | 11,085,052 | |
Virtual Radiologic Corp. | 88,600 | 1,341,404 | |
59,072,326 | |||
Health Care Technology - 0.9% | |||
Omnicell, Inc. (a) | 445,500 | 11,173,140 | |
Life Sciences Tools & Services - 2.1% | |||
Covance, Inc. (a) | 78,500 | 6,528,060 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Life Sciences Tools & Services - continued | |||
Pharmaceutical Product Development, Inc. | 235,700 | $ 10,219,952 | |
QIAGEN NV (a) | 455,500 | 9,292,200 | |
26,040,212 | |||
Pharmaceuticals - 0.5% | |||
XenoPort, Inc. (a)(d) | 105,000 | 6,442,800 | |
TOTAL HEALTH CARE | 172,571,328 | ||
INDUSTRIALS - 12.2% | |||
Aerospace & Defense - 1.2% | |||
BE Aerospace, Inc. (a) | 101,300 | 3,911,193 | |
LMI Aerospace, Inc. (a) | 177,000 | 3,571,860 | |
Spirit AeroSystems Holdings, Inc. Class A (a) | 95,000 | 2,623,900 | |
Triumph Group, Inc. | 100,100 | 5,405,400 | |
15,512,353 | |||
Building Products - 0.3% | |||
Lennox International, Inc. | 101,500 | 3,771,740 | |
Commercial Services & Supplies - 4.3% | |||
Diamond Management & Technology Consultants, Inc. | 845,322 | 3,930,747 | |
eTelecare Global Solutions, Inc. ADR | 1,362,000 | 11,713,200 | |
First Advantage Corp. Class A (a) | 3,300 | 53,592 | |
Huron Consulting Group, Inc. (a) | 156,100 | 11,211,102 | |
InnerWorkings, Inc. (a)(d) | 546,300 | 7,566,255 | |
Navigant Consulting, Inc. (a) | 565,000 | 6,689,600 | |
Team, Inc. (a) | 152,300 | 4,576,615 | |
The Brink's Co. | 49,620 | 3,008,461 | |
Waste Services, Inc. (a) | 471,300 | 4,458,498 | |
53,208,070 | |||
Construction & Engineering - 0.4% | |||
URS Corp. (a) | 121,400 | 5,329,460 | |
Electrical Equipment - 1.0% | |||
Acuity Brands, Inc. | 129,400 | 5,888,994 | |
GrafTech International Ltd. (a) | 437,400 | 6,582,870 | |
12,471,864 | |||
Machinery - 2.4% | |||
Astec Industries, Inc. (a) | 194,000 | 5,988,780 | |
CIRCOR International, Inc. | 109,900 | 4,663,057 | |
Columbus McKinnon Corp. (NY Shares) (a) | 121,300 | 3,101,641 | |
Flow International Corp. (a) | 509,400 | 4,747,608 | |
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Machinery - continued | |||
Force Protection, Inc. (a)(d) | 922,800 | $ 3,774,252 | |
Titan International, Inc. (d) | 139,100 | 3,962,959 | |
Titan Machinery, Inc. | 161,182 | 2,656,279 | |
TurboChef Technologies, Inc. (a) | 61,400 | 629,350 | |
29,523,926 | |||
Road & Rail - 1.4% | |||
J.B. Hunt Transport Services, Inc. | 234,900 | 7,305,390 | |
Knight Transportation, Inc. (d) | 617,600 | 10,598,016 | |
17,903,406 | |||
Trading Companies & Distributors - 1.2% | |||
Genesis Lease Ltd. ADR | 133,500 | 2,683,350 | |
H&E Equipment Services, Inc. (a) | 115,100 | 1,911,811 | |
Kaman Corp. | 180,300 | 5,326,062 | |
Rush Enterprises, Inc. Class A (a) | 303,400 | 5,091,052 | |
15,012,275 | |||
TOTAL INDUSTRIALS | 152,733,094 | ||
INFORMATION TECHNOLOGY - 18.9% | |||
Communications Equipment - 4.1% | |||
Airspan Networks, Inc. (a) | 1,639,800 | 1,902,168 | |
Arris Group, Inc. (a) | 499,100 | 4,387,089 | |
Aruba Networks, Inc. | 482,300 | 4,562,558 | |
Harris Corp. | 73,100 | 3,997,839 | |
NETGEAR, Inc. (a)(d) | 424,009 | 11,304,080 | |
ORBCOMM, Inc. (a)(d) | 420,660 | 2,086,474 | |
Plantronics, Inc. | 262,300 | 5,009,930 | |
Polycom, Inc. (a) | 324,800 | 8,201,200 | |
RADWARE Ltd. (a) | 453,000 | 6,337,470 | |
Starent Networks Corp. | 310,100 | 3,832,836 | |
51,621,644 | |||
Computers & Peripherals - 0.2% | |||
Cray, Inc. (a) | 110,000 | 600,600 | |
STEC, Inc. (a) | 203,760 | 1,513,937 | |
2,114,537 | |||
Electronic Equipment & Instruments - 1.8% | |||
Comverge, Inc. | 277,000 | 5,163,280 | |
Gerber Scientific, Inc. (a) | 591,500 | 5,217,030 | |
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - continued | |||
IPG Photonics Corp. | 558,358 | $ 9,994,608 | |
Trimble Navigation Ltd. (a) | 75,000 | 1,983,750 | |
22,358,668 | |||
Internet Software & Services - 4.0% | |||
Digital River, Inc. (a) | 102,200 | 3,832,500 | |
DivX, Inc. (a)(d) | 657,700 | 9,372,225 | |
Equinix, Inc. (a) | 25,270 | 1,908,643 | |
j2 Global Communications, Inc. (a)(d) | 706,330 | 15,475,690 | |
SAVVIS, Inc. (a) | 165,975 | 3,352,695 | |
ValueClick, Inc. (a) | 100,700 | 2,198,281 | |
VistaPrint Ltd. (a) | 369,858 | 13,762,416 | |
49,902,450 | |||
IT Services - 0.3% | |||
Fidelity National Information Services, Inc. | 103,100 | 4,376,595 | |
Semiconductors & Semiconductor Equipment - 3.4% | |||
Atheros Communications, Inc. (a) | 162,000 | 4,424,220 | |
California Micro Devices Corp. (a)(e) | 1,283,624 | 4,633,883 | |
Cirrus Logic, Inc. (a) | 525,000 | 2,231,250 | |
FormFactor, Inc. (a) | 95,900 | 2,322,698 | |
Hittite Microwave Corp. (a) | 128,000 | 5,096,960 | |
LTX Corp. (a) | 581,929 | 1,571,208 | |
MIPS Technologies, Inc. (a) | 490,222 | 2,181,488 | |
Monolithic Power Systems, Inc. (a) | 115,000 | 1,798,600 | |
Power Integrations, Inc. (a) | 55,000 | 1,401,400 | |
Sigma Designs, Inc. (a) | 75,000 | 3,391,500 | |
TriQuint Semiconductor, Inc. (a) | 300,000 | 1,422,000 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 183,900 | 5,923,419 | |
Volterra Semiconductor Corp. (a) | 80 | 734 | |
Zoran Corp. (a) | 552,500 | 6,519,500 | |
42,918,860 | |||
Software - 5.1% | |||
Blackbaud, Inc. | 720,748 | 19,943,099 | |
CommVault Systems, Inc. (a) | 303,300 | 5,647,446 | |
Deltek, Inc. | 250,000 | 3,250,000 | |
Jack Henry & Associates, Inc. | 394,100 | 9,686,978 | |
OpenTV Corp. Class A (a) | 784,900 | 926,182 | |
Sonic Solutions, Inc. (a)(d) | 497,600 | 4,458,496 | |
SourceForge, Inc. (a) | 1,711,000 | 3,028,470 | |
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Software - continued | |||
THQ, Inc. (a)(d) | 651,200 | $ 11,728,112 | |
Ultimate Software Group, Inc. (a) | 180,000 | 4,869,000 | |
63,537,783 | |||
TOTAL INFORMATION TECHNOLOGY | 236,830,537 | ||
MATERIALS - 5.1% | |||
Chemicals - 1.6% | |||
Airgas, Inc. | 149,800 | 6,952,218 | |
Hercules, Inc. | 364,400 | 6,387,932 | |
Rockwood Holdings, Inc. (a) | 221,400 | 6,500,304 | |
19,840,454 | |||
Metals & Mining - 3.5% | |||
Carpenter Technology Corp. | 82,640 | 5,093,930 | |
Compass Minerals International, Inc. | 264,400 | 11,215,848 | |
First Uranium Corp. | 519,900 | 5,092,539 | |
Haynes International, Inc. (a)(d) | 75,300 | 3,326,754 | |
Mount Gibson Iron Ltd. (a) | 2,638,994 | 6,175,923 | |
Randgold Resources Ltd. sponsored ADR | 262,900 | 12,542,959 | |
43,447,953 | |||
TOTAL MATERIALS | 63,288,407 | ||
TELECOMMUNICATION SERVICES - 1.0% | |||
Diversified Telecommunication Services - 0.8% | |||
Cbeyond, Inc. (a) | 133,380 | 4,500,241 | |
Cincinnati Bell, Inc. (a) | 938,610 | 3,641,807 | |
Iowa Telecommunication Services, Inc. | 118,270 | 1,823,723 | |
9,965,771 | |||
Wireless Telecommunication Services - 0.2% | |||
SBA Communications Corp. Class A (a) | 97,430 | 2,884,902 | |
TOTAL TELECOMMUNICATION SERVICES | 12,850,673 | ||
UTILITIES - 2.5% | |||
Electric Utilities - 1.7% | |||
Great Plains Energy, Inc. | 244,700 | 6,822,236 | |
ITC Holdings Corp. | 140,750 | 7,437,230 | |
Westar Energy, Inc. | 292,700 | 7,130,172 | |
21,389,638 | |||
Common Stocks - continued | |||
Shares | Value | ||
UTILITIES - continued | |||
Multi-Utilities - 0.8% | |||
CMS Energy Corp. | 398,700 | $ 6,247,629 | |
OGE Energy Corp. | 125,800 | 4,117,434 | |
10,365,063 | |||
TOTAL UTILITIES | 31,754,701 | ||
TOTAL COMMON STOCKS (Cost $1,287,755,658) | 1,186,699,983 | ||
U.S. Treasury Obligations - 0.2% | |||
Principal Amount | |||
U.S. Treasury Bills, yield at date of purchase 2.7% to 3.1% 2/28/08 to 3/6/08 (f) | $ 2,340,000 | 2,336,389 | |
Money Market Funds - 11.0% | |||
Shares | |||
Fidelity Cash Central Fund, 3.79% (b) | 58,581,602 | 58,581,602 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 79,385,675 | 79,385,675 | |
TOTAL MONEY MARKET FUNDS (Cost $137,967,277) | 137,967,277 | ||
TOTAL INVESTMENT PORTFOLIO - 105.9% (Cost $1,428,056,365) | 1,327,003,649 | ||
NET OTHER ASSETS - (5.9)% | (74,275,460) | ||
NET ASSETS - 100% | $ 1,252,728,189 |
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Purchased | |||||
Equity Index Contracts | |||||
374 Mini-Russell 2000 Index Contracts | March 2008 | $ 26,741,000 | $ (794,055) |
The face value of futures purchased as a percentage of net assets - 2.1% |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
(f) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $2,091,736. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,060,474 |
Fidelity Securities Lending Cash Central Fund | 470,518 |
Total | $ 1,530,992 |
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: |
Affiliates | Value, beginning of period | Purchases | Sales | Dividend | Value, |
California Micro Devices Corp. | $ 5,410,465 | $ 555,266 | $ 241,212 | $ - | $ 4,633,883 |
Goldleaf Financial Solutions, Inc. | 4,599,644 | - | 1,466,930 | - | - |
Intervest Bancshares Corp. Class A | 6,298,944 | 2,766,977 | 18,647 | - | 5,791,237 |
Total | $ 16,309,053 | $ 3,322,243 | $ 1,726,789 | $ - | $ 10,425,120 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 88.9% |
Bermuda | 4.3% |
United Kingdom | 1.0% |
Others (individually less than 1%) | 5.8% |
100.0% |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $4,033,651 all of which will expire on July 31, 2015. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $77,227,569) - See accompanying schedule: Unaffiliated issuers (cost $1,274,583,425) | $ 1,178,611,252 | |
Fidelity Central Funds (cost $137,967,277) | 137,967,277 | |
Other affiliated issuers (cost $15,505,663) | 10,425,120 | |
Total Investments (cost $1,428,056,365) | $ 1,327,003,649 | |
Foreign currency held at value (cost $25,405) | 24,725 | |
Receivable for investments sold | 30,460,239 | |
Receivable for fund shares sold | 4,245,423 | |
Dividends receivable | 151,772 | |
Distributions receivable from Fidelity Central Funds | 297,744 | |
Receivable for daily variation on futures contracts | 864,177 | |
Prepaid expenses | 3,331 | |
Other receivables | 14,252 | |
Total assets | 1,363,065,312 | |
Liabilities | ||
Payable to custodian bank | $ 54,270 | |
Payable for investments purchased | 29,460,184 | |
Payable for fund shares redeemed | 413,340 | |
Accrued management fee | 701,315 | |
Other affiliated payables | 254,219 | |
Other payables and accrued expenses | 68,120 | |
Collateral on securities loaned, at value | 79,385,675 | |
Total liabilities | 110,337,123 | |
Net Assets | $ 1,252,728,189 | |
Net Assets consist of: | ||
Paid in capital | $ 1,462,844,582 | |
Distributions in excess of net investment income | (998,915) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (107,270,370) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (101,847,108) | |
Net Assets, for 146,680,218 shares outstanding | $ 1,252,728,189 | |
Net Asset Value, offering price and redemption price per share ($1,253,100,869 ÷ 146,680,218 shares) | $ 8.54 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 4,373,055 | |
Interest | 46,821 | |
Income from Fidelity Central Funds | 1,530,992 | |
Total income | 5,950,868 | |
Expenses | ||
Management fee | $ 4,018,952 | |
Transfer agent fees | 1,286,722 | |
Accounting and security lending fees | 189,843 | |
Custodian fees and expenses | 38,330 | |
Independent trustees' compensation | 2,170 | |
Audit | 27,950 | |
Legal | 2,519 | |
Miscellaneous | 31,127 | |
Total expenses before reductions | 5,597,613 | |
Expense reductions | (71,855) | 5,525,758 |
Net investment income (loss) | 425,110 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (93,429,895) | |
Other affiliated issuers | (4,246,938) | |
Foreign currency transactions | (35,540) | |
Futures contracts | (4,607,647) | |
Total net realized gain (loss) | (102,320,020) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (37,616,463) | |
Assets and liabilities in foreign currencies | (320) | |
Futures contracts | (171,666) | |
Total change in net unrealized appreciation (depreciation) | (37,788,449) | |
Net gain (loss) | (140,108,469) | |
Net increase (decrease) in net assets resulting from operations | $ (139,683,359) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | For the period March 22, 2007 (commencement of operations) to | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 425,110 | $ 472,408 |
Net realized gain (loss) | (102,320,020) | (2,785,788) |
Change in net unrealized appreciation (depreciation) | (37,788,449) | (64,058,659) |
Net increase (decrease) in net assets resulting | (139,683,359) | (66,372,039) |
Distributions to shareholders from net investment income | (1,830,941) | - |
Distributions to shareholders from net realized gain | (2,229,984) | - |
Total distributions | (4,060,925) | - |
Share transactions | 445,341,950 | 1,051,452,555 |
Reinvestment of distributions | 4,060,924 | - |
Cost of shares redeemed | (37,400,902) | (614,291) |
Net increase (decrease) in net assets resulting from share transactions | 412,001,972 | 1,050,838,264 |
Redemption fees | 132 | 4,144 |
Total increase (decrease) in net assets | 268,257,820 | 984,470,369 |
Net Assets | ||
Beginning of period | 984,470,369 | - |
End of period (including distributions in excess of net investment income of $998,915 and undistributed net investment income of $406,930, respectively) | $ 1,252,728,189 | $ 984,470,369 |
Other Information Shares | ||
Sold | 48,025,061 | 102,120,347 |
Issued in reinvestment of distributions | 436,164 | - |
Redeemed | (3,841,842) | (59,512) |
Net increase (decrease) | 44,619,383 | 102,060,835 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | |
(Unaudited) | 2007 G | |
Selected Per-Share Data | ||
Net asset value, beginning of period | $ 9.65 | $ 10.00 |
Income from Investment Operations | ||
Net investment income (loss) D | - | .01 |
Net realized and unrealized gain (loss) | (1.07) | (.36) |
Total from investment operations | (1.07) | (.35) |
Distributions from net investment income | (.02) | - |
Distributions from net realized gain | (.02) | - |
Total distributions | (.04) | - |
Redemption fees added to paid in capital | - | - I |
Net asset value, end of period | $ 8.54 | $ 9.65 |
Total Return B,C | (11.17)% | (3.50)% |
Ratios to Average Net Assets E,H | ||
Expenses before reductions | .98% A | 1.00% A |
Expenses net of fee waivers, if any | .98% A | 1.00% A |
Expenses net of all reductions | .97% A | .98% A |
Net investment income (loss) | .07% A | .20% A |
Supplemental Data | ||
Net assets, end of period (000 omitted) | $ 1,252,728 | $ 984,470 |
Portfolio turnover rate F | 155% A | 176% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period March 22, 2007 (commencement of operations) to July 31, 2007.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Opportunities Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. 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
Semiannual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, capital loss carryforwards, losses deferred due to wash sales, and futures transactions.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 63,676,690 | |
Unrealized depreciation | (171,028,165) | |
Net unrealized appreciation (depreciation) | $ (107,351,475) | |
Cost for federal income tax purposes | $ 1,434,355,124 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
4. Operating Policies - continued
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities depositied to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,250,329,042 and $857,802,761, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 an appropriate benchmark index. The Fund's performance adjustment will not take effect until March 1, 2008. Subsequent months will be added until the
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
performance period includes 36 months. For the period, the total annualized management fee rate was .71% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .23% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the Fund's transfer agent.
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $26,500 for the period.
7. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
Semiannual Report
8. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $9,975 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $4,476 and $57,404, respectively.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period mutual funds managed by FMR or an FMR affilitate were the owners of record of substantially of the outstanding shares of the Fund.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
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(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
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Semiannual Report
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Semiannual Report
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Semiannual Report
January 31, 2008
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Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting results") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 915.90 | $ 6.74 |
Hypothetical A | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | |||
Actual | $ 1,000.00 | $ 914.60 | $ 7.94 |
Hypothetical A | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | |||
Actual | $ 1,000.00 | $ 911.90 | $ 10.33 |
Hypothetical A | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | |||
Actual | $ 1,000.00 | $ 911.90 | $ 10.33 |
Hypothetical A | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Small Cap Value | |||
Actual | $ 1,000.00 | $ 916.60 | $ 5.59 |
Hypothetical A | $ 1,000.00 | $ 1,019.30 | $ 5.89 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 916.70 | $ 5.54 |
Hypothetical A | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Small Cap Value | 1.16% |
Institutional Class | 1.15% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Tesoro Corp. | 2.6 | 3.2 |
Carpenter Technology Corp. | 2.3 | 2.4 |
Superior Energy Services, Inc. | 1.9 | 0.8 |
Shaw Group, Inc. | 1.9 | 1.6 |
MFA Mortgage Investments, Inc. | 1.6 | 0.0 |
FTI Consulting, Inc. | 1.6 | 1.1 |
Yamana Gold, Inc. | 1.5 | 0.0 |
Southwestern Energy Co. | 1.4 | 0.9 |
Telvent GIT SA | 1.4 | 1.6 |
National Financial Partners Corp. | 1.4 | 1.5 |
17.6 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Financials | 23.6 | 23.1 |
Industrials | 14.0 | 17.0 |
Information Technology | 13.5 | 17.1 |
Energy | 12.5 | 10.6 |
Consumer Discretionary | 11.3 | 11.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 95.7% | ![]() | Stocks 98.1% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 8.1% | ** Foreign investments | 7.6% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.7% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 11.3% | |||
Auto Components - 0.9% | |||
Aftermarket Technology Corp. (a) | 445,000 | $ 11,307,450 | |
Hotels, Restaurants & Leisure - 1.2% | |||
Pinnacle Entertainment, Inc. (a)(d) | 349,999 | 6,387,482 | |
Red Robin Gourmet Burgers, Inc. (a) | 130,000 | 4,534,400 | |
Wyndham Worldwide Corp. | 175,000 | 4,123,000 | |
15,044,882 | |||
Household Durables - 2.1% | |||
Ethan Allen Interiors, Inc. (d) | 210,300 | 6,508,785 | |
Jarden Corp. (a)(d) | 669,600 | 16,766,784 | |
Ryland Group, Inc. | 80,000 | 2,696,800 | |
25,972,369 | |||
Leisure Equipment & Products - 1.7% | |||
Arctic Cat, Inc. | 190,000 | 1,757,500 | |
Brunswick Corp. | 110,300 | 2,094,597 | |
Callaway Golf Co. | 325,000 | 5,824,000 | |
MarineMax, Inc. (a) | 30,000 | 464,100 | |
RC2 Corp. (a) | 614,555 | 11,541,343 | |
21,681,540 | |||
Media - 0.8% | |||
Charter Communications, Inc. Class A (a) | 1,250,000 | 1,462,500 | |
Sinclair Broadcast Group, Inc. Class A | 1,030,500 | 9,274,500 | |
10,737,000 | |||
Specialty Retail - 3.3% | |||
Advance Auto Parts, Inc. | 300,000 | 10,704,000 | |
Asbury Automotive Group, Inc. | 385,000 | 5,459,300 | |
Build-A-Bear Workshop, Inc. (a) | 84,063 | 1,145,779 | |
Collective Brands, Inc. (a) | 275,000 | 4,845,500 | |
Gymboree Corp. (a) | 165,000 | 6,306,300 | |
Lithia Motors, Inc. Class A (sub. vtg.) (d) | 54,000 | 825,660 | |
Select Comfort Corp. (a)(d) | 665,000 | 5,226,900 | |
Shoe Carnival, Inc. (a) | 75,258 | 1,112,313 | |
The Men's Wearhouse, Inc. | 225,000 | 5,735,250 | |
41,361,002 | |||
Textiles, Apparel & Luxury Goods - 1.3% | |||
FGX International Ltd. | 119,658 | 1,208,546 | |
Skechers U.S.A., Inc. Class A (sub. vtg.) (a) | 505,000 | 10,110,100 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Steven Madden Ltd. (a) | 190,000 | $ 3,243,300 | |
Warnaco Group, Inc. (a) | 70,000 | 2,512,300 | |
17,074,246 | |||
TOTAL CONSUMER DISCRETIONARY | 143,178,489 | ||
CONSUMER STAPLES - 4.2% | |||
Food & Staples Retailing - 1.6% | |||
The Great Atlantic & Pacific Tea Co. (a)(d) | 235,000 | 7,019,450 | |
The Pantry, Inc. (a)(d) | 471,000 | 13,687,260 | |
20,706,710 | |||
Food Products - 2.1% | |||
Chiquita Brands International, Inc. (a) | 171,000 | 3,194,280 | |
Corn Products International, Inc. | 360,000 | 12,168,000 | |
Diamond Foods, Inc. | 165,400 | 3,137,638 | |
Hain Celestial Group, Inc. (a) | 140,000 | 3,780,000 | |
Lighthouse Caledonia ASA (d) | 60,817 | 46,659 | |
Marine Harvest ASA (a) | 7,155,000 | 3,854,049 | |
26,180,626 | |||
Personal Products - 0.5% | |||
Bare Escentuals, Inc. (a) | 75,000 | 1,788,000 | |
Physicians Formula Holdings, Inc. (a) | 128,100 | 1,214,388 | |
Prestige Brands Holdings, Inc. (a) | 469,674 | 3,508,465 | |
6,510,853 | |||
TOTAL CONSUMER STAPLES | 53,398,189 | ||
ENERGY - 12.5% | |||
Energy Equipment & Services - 3.4% | |||
Exterran Holdings, Inc. (a) | 85,000 | 5,545,400 | |
Hornbeck Offshore Services, Inc. (a) | 106,617 | 4,123,946 | |
NATCO Group, Inc. Class A (a) | 64,219 | 2,939,946 | |
Oil States International, Inc. (a) | 189,760 | 6,652,986 | |
Superior Energy Services, Inc. (a) | 590,000 | 23,653,100 | |
42,915,378 | |||
Oil, Gas & Consumable Fuels - 9.1% | |||
Alpha Natural Resources, Inc. (a) | 114,600 | 3,834,516 | |
Cabot Oil & Gas Corp. | 320,000 | 12,380,800 | |
Forest Oil Corp. (a) | 260,300 | 11,770,766 | |
Common Stocks - continued | |||
Shares | Value | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Mariner Energy, Inc. (a) | 590,000 | $ 14,785,400 | |
Petrohawk Energy Corp. (a) | 790,000 | 12,442,500 | |
Petroleum Development Corp. (a) | 127,622 | 7,338,265 | |
Southwestern Energy Co. (a) | 320,000 | 17,891,200 | |
Tesoro Corp. | 857,600 | 33,489,278 | |
Western Refining, Inc. | 80,000 | 1,708,000 | |
115,640,725 | |||
TOTAL ENERGY | 158,556,103 | ||
FINANCIALS - 23.6% | |||
Capital Markets - 2.1% | |||
American Capital Strategies Ltd. (d) | 98,700 | 3,471,279 | |
KBW, Inc. (a)(d) | 395,000 | 11,735,450 | |
MF Global Ltd. | 185,000 | 5,559,250 | |
TradeStation Group, Inc. (a) | 508,300 | 5,540,470 | |
26,306,449 | |||
Commercial Banks - 4.1% | |||
Boston Private Financial Holdings, Inc. (d) | 655,200 | 14,958,216 | |
Center Financial Corp., California | 224,052 | 2,594,522 | |
East West Bancorp, Inc. | 28,800 | 692,928 | |
First State Bancorp. | 483,500 | 6,072,760 | |
Investors Bancorp, Inc. (a)(d) | 190,000 | 2,897,500 | |
South Financial Group, Inc. | 370,000 | 6,393,600 | |
Sterling Bancshares, Inc. | 235,000 | 2,357,050 | |
UMB Financial Corp. | 215,000 | 9,057,950 | |
Wintrust Financial Corp. | 191,260 | 7,275,530 | |
52,300,056 | |||
Consumer Finance - 0.3% | |||
Advanta Corp. Class B | 97,500 | 974,025 | |
Dollar Financial Corp. (a) | 135,000 | 3,399,300 | |
4,373,325 | |||
Diversified Financial Services - 0.7% | |||
Interactive Brokers Group, Inc. | 135,000 | 4,699,350 | |
MarketAxess Holdings, Inc. (a) | 400,000 | 3,780,000 | |
8,479,350 | |||
Insurance - 10.2% | |||
American Equity Investment Life Holding Co. | 1,289,506 | 10,664,215 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Insurance - continued | |||
Aspen Insurance Holdings Ltd. | 360,200 | $ 10,164,844 | |
Delphi Financial Group, Inc. Class A | 277,850 | 8,718,933 | |
HCC Insurance Holdings, Inc. | 390,920 | 10,891,031 | |
Infinity Property & Casualty Corp. | 235,000 | 9,369,450 | |
IPC Holdings Ltd. | 573,740 | 14,762,330 | |
Max Capital Group Ltd. | 175,000 | 4,968,250 | |
National Financial Partners Corp. (d) | 471,300 | 17,013,930 | |
Navigators Group, Inc. (a) | 104,862 | 6,053,683 | |
PartnerRe Ltd. | 50,000 | 3,964,000 | |
Platinum Underwriters Holdings Ltd. | 329,700 | 11,127,375 | |
United America Indemnity Ltd. Class A (a) | 142,922 | 2,931,330 | |
Willis Group Holdings Ltd. | 195,000 | 6,871,800 | |
Zenith National Insurance Corp. | 294,000 | 11,707,080 | |
129,208,251 | |||
Real Estate Investment Trusts - 3.0% | |||
Annaly Capital Management, Inc. | 577,000 | 11,378,440 | |
Chimera Investment Corp. | 259,400 | 4,967,510 | |
Developers Diversified Realty Corp. | 30,000 | 1,234,500 | |
MFA Mortgage Investments, Inc. | 2,028,800 | 20,693,760 | |
38,274,210 | |||
Real Estate Management & Development - 1.2% | |||
Jones Lang LaSalle, Inc. (d) | 193,000 | 15,015,400 | |
Thrifts & Mortgage Finance - 2.0% | |||
Downey Financial Corp. (d) | 65,000 | 2,242,500 | |
Farmer Mac Class C (non-vtg.) | 115,000 | 3,164,800 | |
FirstFed Financial Corp. (a)(d) | 100,000 | 4,195,000 | |
Home Federal Bancorp, Inc. | 270,300 | 2,878,695 | |
Meridian Interstate Bancorp, Inc. (a)(d) | 191,100 | 1,834,560 | |
United Financial Bancorp, Inc. | 194,600 | 2,169,790 | |
Washington Federal, Inc. | 305,000 | 7,448,100 | |
Westfield Financial, Inc. | 125,000 | 1,280,000 | |
25,213,445 | |||
TOTAL FINANCIALS | 299,170,486 | ||
HEALTH CARE - 5.0% | |||
Biotechnology - 0.5% | |||
Theravance, Inc. (a) | 300,000 | 5,919,000 | |
Health Care Equipment & Supplies - 0.3% | |||
Zoll Medical Corp. (a) | 133,200 | 3,551,112 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - 2.7% | |||
Air Methods Corp. (a) | 209,167 | $ 9,596,582 | |
AMERIGROUP Corp. (a) | 245,000 | 9,192,400 | |
Owens & Minor, Inc. | 75,000 | 3,099,000 | |
Pediatrix Medical Group, Inc. (a) | 110,000 | 7,489,900 | |
ResCare, Inc. (a) | 75,000 | 1,677,750 | |
Universal American Financial Corp. (a) | 150,000 | 3,139,500 | |
34,195,132 | |||
Life Sciences Tools & Services - 1.3% | |||
Kendle International, Inc. (a) | 100,000 | 4,239,000 | |
PerkinElmer, Inc. | 100,000 | 2,489,000 | |
Pharmaceutical Product Development, Inc. | 220,000 | 9,539,200 | |
16,267,200 | |||
Pharmaceuticals - 0.2% | |||
Perrigo Co. | 100,000 | 3,084,000 | |
TOTAL HEALTH CARE | 63,016,444 | ||
INDUSTRIALS - 14.0% | |||
Aerospace & Defense - 2.1% | |||
AAR Corp. (a) | 182,300 | 5,370,558 | |
DRS Technologies, Inc. | 144,000 | 7,728,480 | |
Hexcel Corp. (a) | 250,200 | 5,461,866 | |
Orbital Sciences Corp. (a) | 325,000 | 7,572,500 | |
26,133,404 | |||
Air Freight & Logistics - 1.1% | |||
Hub Group, Inc. Class A (a) | 220,000 | 6,408,600 | |
Park-Ohio Holdings Corp. (a) | 356,646 | 7,974,605 | |
14,383,205 | |||
Airlines - 0.3% | |||
AirTran Holdings, Inc. (a)(d) | 440,000 | 3,797,200 | |
Commercial Services & Supplies - 2.3% | |||
FTI Consulting, Inc. (a)(d) | 360,000 | 19,911,600 | |
Interface, Inc. Class A | 148,590 | 2,371,496 | |
Navigant Consulting, Inc. (a) | 125,000 | 1,480,000 | |
Team, Inc. (a) | 176,256 | 5,296,493 | |
29,059,589 | |||
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Construction & Engineering - 3.1% | |||
Shaw Group, Inc. (a)(d) | 418,000 | $ 23,617,000 | |
URS Corp. (a) | 351,576 | 15,434,186 | |
39,051,186 | |||
Electrical Equipment - 1.2% | |||
Belden, Inc. | 345,000 | 14,593,500 | |
Machinery - 2.1% | |||
Accuride Corp. (a) | 921,000 | 5,774,670 | |
AGCO Corp. (a) | 65,000 | 3,914,300 | |
Astec Industries, Inc. (a) | 195,000 | 6,019,650 | |
Commercial Vehicle Group, Inc. (a) | 200,000 | 2,000,000 | |
Flow International Corp. (a) | 215,000 | 2,003,800 | |
Force Protection, Inc. (a)(d) | 910,000 | 3,721,900 | |
Manitowoc Co., Inc. | 89,940 | 3,428,513 | |
Titan Machinery, Inc. | 20,000 | 329,600 | |
27,192,433 | |||
Road & Rail - 0.9% | |||
J.B. Hunt Transport Services, Inc. (d) | 265,000 | 8,241,500 | |
YRC Worldwide, Inc. (a)(d) | 195,000 | 3,570,450 | |
11,811,950 | |||
Trading Companies & Distributors - 0.9% | |||
Kaman Corp. | 223,822 | 6,611,702 | |
Rush Enterprises, Inc.: | |||
Class A (a) | 247,500 | 4,153,050 | |
Class B (a) | 25,000 | 392,500 | |
11,157,252 | |||
TOTAL INDUSTRIALS | 177,179,719 | ||
INFORMATION TECHNOLOGY - 13.5% | |||
Communications Equipment - 2.1% | |||
Arris Group, Inc. (a)(d) | 1,735,000 | 15,250,650 | |
Polycom, Inc. (a) | 470,000 | 11,867,500 | |
27,118,150 | |||
Computers & Peripherals - 0.2% | |||
Data Domain, Inc. (d) | 60,000 | 1,352,400 | |
Quantum Corp. (a) | 725,000 | 1,667,500 | |
3,019,900 | |||
Electronic Equipment & Instruments - 3.9% | |||
Amphenol Corp. Class A | 40,000 | 1,597,600 | |
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - continued | |||
Ingram Micro, Inc. Class A (a) | 762,700 | $ 13,560,806 | |
Insight Enterprises, Inc. (a) | 710,600 | 12,272,062 | |
Itron, Inc. (a) | 60,000 | 4,944,000 | |
Mettler-Toledo International, Inc. (a) | 98,700 | 9,800,910 | |
Vishay Intertechnology, Inc. (a) | 677,491 | 7,106,881 | |
49,282,259 | |||
Internet Software & Services - 0.7% | |||
j2 Global Communications, Inc. (a) | 430,800 | 9,438,828 | |
IT Services - 2.3% | |||
CACI International, Inc. Class A (a) | 60,000 | 2,615,400 | |
ManTech International Corp. Class A (a) | 105,000 | 4,294,500 | |
Ness Technologies, Inc. (a) | 215,200 | 1,977,688 | |
Telvent GIT SA | 856,000 | 17,376,800 | |
VeriFone Holdings, Inc. (a)(d) | 140,000 | 2,739,800 | |
29,004,188 | |||
Semiconductors & Semiconductor Equipment - 1.9% | |||
Entegris, Inc. (a) | 500,000 | 3,850,000 | |
FormFactor, Inc. (a) | 55,000 | 1,332,100 | |
MKS Instruments, Inc. (a) | 208,900 | 3,885,540 | |
Pericom Semiconductor Corp. (a) | 80,000 | 1,084,800 | |
Skyworks Solutions, Inc. (a) | 300,000 | 2,415,000 | |
TriQuint Semiconductor, Inc. (a) | 600,000 | 2,844,000 | |
Zoran Corp. (a) | 755,000 | 8,909,000 | |
24,320,440 | |||
Software - 2.4% | |||
Blackbaud, Inc. | 265,000 | 7,332,550 | |
Quest Software, Inc. (a) | 790,000 | 11,810,500 | |
THQ, Inc. (a) | 590,000 | 10,625,900 | |
29,768,950 | |||
TOTAL INFORMATION TECHNOLOGY | 171,952,715 | ||
MATERIALS - 7.7% | |||
Chemicals - 2.3% | |||
Airgas, Inc. | 170,000 | 7,889,700 | |
CF Industries Holdings, Inc. | 140,000 | 14,970,200 | |
H.B. Fuller Co. | 205,000 | 4,255,800 | |
Tronox, Inc. Class A | 350,000 | 2,555,000 | |
29,670,700 | |||
Common Stocks - continued | |||
Shares | Value | ||
MATERIALS - continued | |||
Containers & Packaging - 0.2% | |||
Smurfit-Stone Container Corp. (a) | 240,000 | $ 2,277,600 | |
Metals & Mining - 5.2% | |||
Carpenter Technology Corp. | 480,000 | 29,587,200 | |
Compass Minerals International, Inc. (d) | 356,466 | 15,121,288 | |
Titanium Metals Corp. | 120,000 | 2,608,800 | |
Yamana Gold, Inc. | 1,107,474 | 18,374,214 | |
65,691,502 | |||
TOTAL MATERIALS | 97,639,802 | ||
TELECOMMUNICATION SERVICES - 0.7% | |||
Diversified Telecommunication Services - 0.7% | |||
Cincinnati Bell, Inc. (a) | 500,000 | 1,940,000 | |
Level 3 Communications, Inc. (a) | 800,000 | 2,752,000 | |
Time Warner Telecom, Inc. Class A (sub. vtg.) (a) | 230,000 | 4,020,400 | |
8,712,400 | |||
UTILITIES - 3.2% | |||
Electric Utilities - 1.2% | |||
ITC Holdings Corp. (d) | 189,000 | 9,986,760 | |
Westar Energy, Inc. | 200,000 | 4,872,000 | |
14,858,760 | |||
Independent Power Producers & Energy Traders - 0.9% | |||
Dynegy, Inc. Class A (a) | 705,000 | 4,949,100 | |
NRG Energy, Inc. (a) | 168,000 | 6,483,120 | |
11,432,220 | |||
Multi-Utilities - 1.1% | |||
CMS Energy Corp. | 892,500 | 13,985,475 | |
TOTAL UTILITIES | 40,276,455 | ||
TOTAL COMMON STOCKS (Cost $1,224,387,430) | 1,213,080,802 | ||
Money Market Funds - 11.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 55,087,550 | $ 55,087,550 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 95,440,430 | 95,440,430 | |
TOTAL MONEY MARKET FUNDS (Cost $150,527,980) | 150,527,980 | ||
TOTAL INVESTMENT PORTFOLIO - 107.6% (Cost $1,374,915,410) | 1,363,608,782 | ||
NET OTHER ASSETS - (7.6)% | (96,246,400) | ||
NET ASSETS - 100% | $ 1,267,362,382 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,069,997 |
Fidelity Securities Lending Cash Central Fund | 527,171 |
Total | $ 1,597,168 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $96,848,669) - See accompanying schedule: Unaffiliated issuers (cost $1,224,387,430) | $ 1,213,080,802 | |
Fidelity Central Funds (cost $150,527,980) | 150,527,980 | |
Total Investments (cost $1,374,915,410) | $ 1,363,608,782 | |
Receivable for investments sold | 7,985,390 | |
Receivable for fund shares sold | 3,012,143 | |
Dividends receivable | 302,418 | |
Distributions receivable from Fidelity Central Funds | 376,852 | |
Prepaid expenses | 3,991 | |
Receivable from investment adviser for expense reductions | 9,994 | |
Other receivables | 1,670 | |
Total assets | 1,375,301,240 | |
Liabilities | ||
Payable for investments purchased | $ 8,962,609 | |
Payable for fund shares redeemed | 2,169,504 | |
Accrued management fee | 919,002 | |
Distribution fees payable | 59,043 | |
Other affiliated payables | 321,337 | |
Other payables and accrued expenses | 66,933 | |
Collateral on securities loaned, at value | 95,440,430 | |
Total liabilities | 107,938,858 | |
Net Assets | $ 1,267,362,382 | |
Net Assets consist of: | ||
Paid in capital | $ 1,264,762,568 | |
Accumulated net investment loss | (779,787) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,686,229 | |
Net unrealized appreciation (depreciation) on investments | (11,306,628) | |
Net Assets | $ 1,267,362,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.64 | |
Maximum offering price per share (100/94.25 of $12.64) | $ 13.41 | |
Class T: | $ 12.57 | |
Maximum offering price per share (100/96.50 of $12.57) | $ 13.03 | |
Class B: | $ 12.45 | |
Class C: | $ 12.45 | |
Small Cap Value: | $ 12.71 | |
Institutional Class: | $ 12.71 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 5,828,806 | |
Interest | 2,368 | |
Income from Fidelity Central Funds (including $527,171 from security lending) | 1,597,168 | |
Total income | 7,428,342 | |
Expenses | ||
Management fee | $ 4,783,096 | |
Performance adjustment | 971,305 | |
Transfer agent fees | 1,733,442 | |
Distribution fees | 410,742 | |
Accounting and security lending fees | 223,101 | |
Custodian fees and expenses | 20,218 | |
Independent trustees' compensation | 2,839 | |
Registration fees | 70,480 | |
Audit | 30,595 | |
Legal | 3,797 | |
Miscellaneous | 40,960 | |
Total expenses before reductions | 8,290,575 | |
Expense reductions | (82,446) | 8,208,129 |
Net investment income (loss) | (779,787) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 30,130,520 | |
Foreign currency transactions | 91,090 | |
Total net realized gain (loss) | 30,221,610 | |
Change in net unrealized appreciation (depreciation) on investment securities | (145,320,911) | |
Net gain (loss) | (115,099,301) | |
Net increase (decrease) in net assets resulting from operations | $ (115,879,088) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (779,787) | $ (2,821,365) |
Net realized gain (loss) | 30,221,610 | 58,301,578 |
Change in net unrealized appreciation (depreciation) | (145,320,911) | 108,216,572 |
Net increase (decrease) in net assets resulting | (115,879,088) | 163,696,785 |
Distributions to shareholders from net realized gain | (53,457,458) | (55,419,267) |
Share transactions - net increase (decrease) | 32,092,403 | 206,517,786 |
Redemption fees | 98,489 | 174,668 |
Total increase (decrease) in net assets | (137,145,654) | 314,969,972 |
Net Assets | ||
Beginning of period | 1,404,508,036 | 1,089,538,064 |
End of period (including accumulated net investment loss of $779,787 and $0, respectively) | $ 1,267,362,382 | $ 1,404,508,036 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.34 | $ 13.17 | $ 12.80 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.02) | (.06) | (.03) | (.04) |
Net realized and unrealized gain (loss) | (1.15) | 1.90 | .74 | 2.84 |
Total from investment operations | (1.17) | 1.84 | .71 | 2.80 |
Distributions from net investment income | - | - | - | (.01) |
Distributions from net realized gain | (.53) | (.67) | (.35) | - |
Total distributions | (.53) | (.67) | (.35) | (.01) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.64 | $ 14.34 | $ 13.17 | $ 12.80 |
Total Return B, C, D | (8.41)% | 14.59% | 5.72% | 28.06% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 1.46% A | 1.45% | 1.51% | 1.46% A |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.44% A |
Expenses net of all reductions | 1.40% A | 1.40% | 1.36% | 1.38% A |
Net investment income (loss) | (.30)% A | (.44)% | (.24)% | (.46)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 56,041 | $ 61,357 | $ 39,931 | $ 9,390 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.28 | $ 13.13 | $ 12.78 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.04) | (.10) | (.07) | (.06) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.83 |
Total from investment operations | (1.18) | 1.80 | .67 | 2.77 |
Distributions from net realized gain | (.53) | (.65) | (.33) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.57 | $ 14.28 | $ 13.13 | $ 12.78 |
Total Return B, C, D | (8.54)% | 14.34% | 5.47% | 27.80% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 1.71% A | 1.66% | 1.67% | 1.72% A |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.68% A |
Expenses net of all reductions | 1.65% A | 1.65% | 1.61% | 1.62% A |
Net investment income (loss) | (.56)% A | (.69)% | (.49)% | (.70)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 37,485 | $ 51,518 | $ 45,460 | $ 12,725 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.19 | $ 13.07 | $ 12.73 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.07) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.82 |
Total from investment operations | (1.21) | 1.73 | .61 | 2.72 |
Distributions from net realized gain | (.53) | (.61) | (.28) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.45 | $ 14.19 | $ 13.07 | $ 12.73 |
Total Return B, C, D | (8.81)% | 13.78% | 4.97% | 27.30% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 2.21% A | 2.20% | 2.26% | 2.24% A |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% A |
Expenses net of all reductions | 2.15% A | 2.15% | 2.11% | 2.13% A |
Net investment income (loss) | (1.06)% A | (1.19)% | (.99)% | (1.21)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 9,681 | $ 12,075 | $ 10,214 | $ 3,931 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.19 | $ 13.07 | $ 12.74 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.07) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.83 |
Total from investment operations | (1.21) | 1.73 | .61 | 2.73 |
Distributions from net realized gain | (.53) | (.61) | (.29) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.45 | $ 14.19 | $ 13.07 | $ 12.74 |
Total Return B, C, D | (8.81)% | 13.77% | 4.92% | 27.40% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 2.21% A | 2.20% | 2.22% | 2.17% A |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.17% A |
Expenses net of all reductions | 2.15% A | 2.15% | 2.11% | 2.11% A |
Net investment income (loss) | (1.06)% A | (1.19)% | (.99)% | (1.19)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 26,598 | $ 34,155 | $ 26,791 | $ 11,732 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Value
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | - I | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (1.16) | 1.91 | .74 | 2.84 |
Total from investment operations | (1.16) | 1.89 | .75 | 2.83 |
Distributions from net investment income | - | - | (.01) | (.01) |
Distributions from net realized gain | (.56) | (.68) | (.36) | - |
Total distributions | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in | - I | - I | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (8.34)% | 14.96% | 6.07% | 28.36% |
Ratios to Average Net Assets E, H | ||||
Expenses before reductions | 1.16% A | 1.11% | 1.09% | 1.05% A |
Expenses net of fee waivers, if any | 1.16% A | 1.11% | 1.09% | 1.05% A |
Expenses net of all reductions | 1.15% A | 1.11% | 1.06% | .99% A |
Net investment income (loss) | (.05)% A | (.15)% | .06% | (.08)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 1,126,876 | $ 1,233,808 | $ 957,720 | $ 582,689 |
Portfolio turnover rate F | 65% A | 67% | 93% | 60% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period November 3, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | - I | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (1.16) | 1.91 | .74 | 2.84 |
Total from investment operations | (1.16) | 1.89 | .75 | 2.83 |
Distributions from net investment income | - | - | (.01) | (.01) |
Distributions from net realized gain | (.56) | (.68) | (.36) | - |
Total distributions | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (8.33)% | 14.99% | 6.08% | 28.36% |
Ratios to Average Net Assets E, H | ||||
Expenses before reductions | 1.15% A | 1.10% | 1.08% | 1.07% A |
Expenses net of fee waivers, if any | 1.15% A | 1.10% | 1.08% | 1.07% A |
Expenses net of all reductions | 1.15% A | 1.10% | 1.05% | 1.01% A |
Net investment income (loss) | (.05)% A | (.13)% | .08% | (.10)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 10,681 | $ 11,594 | $ 9,422 | $ 3,761 |
Portfolio turnover rate F | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period November 3, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Value Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Small Cap Value and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 166,044,860 |
Unrealized depreciation | (178,526,118) |
Net unrealized appreciation (depreciation) | $ (12,481,258) |
Cost for federal income tax purposes | $ 1,376,090,040 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $428,542,771 and $477,603,433, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 the retail class of the Fund, Small Cap Value as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .85% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 77,135 | $ 9,140 |
Class T | .25% | .25% | 115,376 | - |
Class B | .75% | .25% | 56,978 | 42,734 |
Class C | .75% | .25% | 161,253 | 34,454 |
$ 410,742 | $ 86,328 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 28,666 |
Class T | 5,751 |
Class B* | 9,111 |
Class C* | 1,258 |
$ 44,786 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for Small Cap Value.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 94,193 | .30 |
Class T | 70,252 | .30 |
Class B | 17,520 | .31 |
Class C | 49,267 | .30 |
Small Cap Value | 1,488,552 | .25 |
Institutional Class | 13,658 | .24 |
$ 1,733,442 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $8,865 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,869 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation
Semiannual Report
8. Security Lending - continued
to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.40% | $ 18,399 |
Class T | 1.65% | 12,738 |
Class B | 2.15% | 3,326 |
Class C | 2.15% | 8,943 |
$ 43,406 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,175 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses.
During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Class A | $ 347 |
Small Cap Value | 37,389 |
Institutional Class | 129 |
$ 37,865 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 2,334,230 | $ 2,137,128 |
Class T | 1,800,458 | 2,317,701 |
Class B | 442,697 | 493,632 |
Class C | 1,258,476 | 1,276,323 |
Small Cap Value | 47,176,108 | 48,691,674 |
Institutional Class | 445,489 | 502,809 |
Total | $ 53,457,458 | $ 55,419,267 |
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended January 31, | Year ended | Six months ended January 31, | Year ended | |
Class A | ||||
Shares sold | 1,037,790 | 2,083,427 | $ 14,370,246 | $ 29,477,855 |
Reinvestment of distributions | 158,451 | 153,067 | 2,181,136 | 1,967,811 |
Shares redeemed | (1,039,685) | (990,255) | (14,135,562) | (13,986,913) |
Net increase (decrease) | 156,556 | 1,246,239 | $ 2,415,820 | $ 17,458,753 |
Class T | ||||
Shares sold | 333,957 | 1,416,878 | $ 4,534,972 | $ 19,764,686 |
Reinvestment of distributions | 127,052 | 158,416 | 1,740,318 | 2,031,495 |
Shares redeemed | (1,086,149) | (1,429,554) | (14,795,703) | (20,059,646) |
Net increase (decrease) | (625,140) | 145,740 | $ (8,520,413) | $ 1,736,535 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended January 31, | Year ended | Six months ended January 31, | Year ended | |
Class B | ||||
Shares sold | 66,563 | 297,938 | $ 904,855 | $ 4,153,087 |
Reinvestment of distributions | 29,083 | 34,686 | 395,378 | 444,445 |
Shares redeemed | (169,279) | (263,033) | (2,254,867) | (3,714,165) |
Net increase (decrease) | (73,633) | 69,591 | $ (954,634) | $ 883,367 |
Class C | ||||
Shares sold | 288,574 | 834,910 | $ 3,916,465 | $ 11,698,988 |
Reinvestment of distributions | 82,042 | 84,926 | 1,115,170 | 1,089,287 |
Shares redeemed | (641,818) | (562,438) | (8,548,816) | (7,834,552) |
Net increase (decrease) | (271,202) | 357,398 | $ (3,517,181) | $ 4,953,723 |
Small Cap Value | ||||
Shares sold | 18,361,917 | 42,235,359 | $ 252,244,988 | $ 595,504,607 |
Reinvestment of distributions | 3,344,768 | 3,617,365 | 46,241,128 | 46,609,140 |
Shares redeemed | (18,555,534) | (32,779,622) | (256,328,053) | (461,808,869) |
Net increase (decrease) | 3,151,151 | 13,073,102 | $ 42,158,063 | $ 180,304,878 |
Institutional Class | ||||
Shares sold | 224,981 | 309,983 | $ 3,126,200 | $ 4,413,286 |
Reinvestment of distributions | 21,655 | 23,286 | 299,380 | 300,279 |
Shares redeemed | (209,757) | (242,217) | (2,914,832) | (3,533,035) |
Net increase (decrease) | 36,879 | 91,052 | $ 510,748 | $ 1,180,530 |
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Semiannual Report
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Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
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Fidelity Advisor
Small Cap Value
Fund - Class A, Class T,
Class B and Class C
Semiannual Report
January 31, 2008
Class A, Class T, Class B
and Class C are classes of
Fidelity® Small Cap Value Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 915.90 | $ 6.74 |
Hypothetical A | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | |||
Actual | $ 1,000.00 | $ 914.60 | $ 7.94 |
Hypothetical A | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | |||
Actual | $ 1,000.00 | $ 911.90 | $ 10.33 |
Hypothetical A | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | |||
Actual | $ 1,000.00 | $ 911.90 | $ 10.33 |
Hypothetical A | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Small Cap Value | |||
Actual | $ 1,000.00 | $ 916.60 | $ 5.59 |
Hypothetical A | $ 1,000.00 | $ 1,019.30 | $ 5.89 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 916.70 | $ 5.54 |
Hypothetical A | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Small Cap Value | 1.16% |
Institutional Class | 1.15% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Tesoro Corp. | 2.6 | 3.2 |
Carpenter Technology Corp. | 2.3 | 2.4 |
Superior Energy Services, Inc. | 1.9 | 0.8 |
Shaw Group, Inc. | 1.9 | 1.6 |
MFA Mortgage Investments, Inc. | 1.6 | 0.0 |
FTI Consulting, Inc. | 1.6 | 1.1 |
Yamana Gold, Inc. | 1.5 | 0.0 |
Southwestern Energy Co. | 1.4 | 0.9 |
Telvent GIT SA | 1.4 | 1.6 |
National Financial Partners Corp. | 1.4 | 1.5 |
17.6 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Financials | 23.6 | 23.1 |
Industrials | 14.0 | 17.0 |
Information Technology | 13.5 | 17.1 |
Energy | 12.5 | 10.6 |
Consumer Discretionary | 11.3 | 11.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 95.7% | ![]() | Stocks 98.1% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 8.1% | ** Foreign investments | 7.6% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.7% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 11.3% | |||
Auto Components - 0.9% | |||
Aftermarket Technology Corp. (a) | 445,000 | $ 11,307,450 | |
Hotels, Restaurants & Leisure - 1.2% | |||
Pinnacle Entertainment, Inc. (a)(d) | 349,999 | 6,387,482 | |
Red Robin Gourmet Burgers, Inc. (a) | 130,000 | 4,534,400 | |
Wyndham Worldwide Corp. | 175,000 | 4,123,000 | |
15,044,882 | |||
Household Durables - 2.1% | |||
Ethan Allen Interiors, Inc. (d) | 210,300 | 6,508,785 | |
Jarden Corp. (a)(d) | 669,600 | 16,766,784 | |
Ryland Group, Inc. | 80,000 | 2,696,800 | |
25,972,369 | |||
Leisure Equipment & Products - 1.7% | |||
Arctic Cat, Inc. | 190,000 | 1,757,500 | |
Brunswick Corp. | 110,300 | 2,094,597 | |
Callaway Golf Co. | 325,000 | 5,824,000 | |
MarineMax, Inc. (a) | 30,000 | 464,100 | |
RC2 Corp. (a) | 614,555 | 11,541,343 | |
21,681,540 | |||
Media - 0.8% | |||
Charter Communications, Inc. Class A (a) | 1,250,000 | 1,462,500 | |
Sinclair Broadcast Group, Inc. Class A | 1,030,500 | 9,274,500 | |
10,737,000 | |||
Specialty Retail - 3.3% | |||
Advance Auto Parts, Inc. | 300,000 | 10,704,000 | |
Asbury Automotive Group, Inc. | 385,000 | 5,459,300 | |
Build-A-Bear Workshop, Inc. (a) | 84,063 | 1,145,779 | |
Collective Brands, Inc. (a) | 275,000 | 4,845,500 | |
Gymboree Corp. (a) | 165,000 | 6,306,300 | |
Lithia Motors, Inc. Class A (sub. vtg.) (d) | 54,000 | 825,660 | |
Select Comfort Corp. (a)(d) | 665,000 | 5,226,900 | |
Shoe Carnival, Inc. (a) | 75,258 | 1,112,313 | |
The Men's Wearhouse, Inc. | 225,000 | 5,735,250 | |
41,361,002 | |||
Textiles, Apparel & Luxury Goods - 1.3% | |||
FGX International Ltd. | 119,658 | 1,208,546 | |
Skechers U.S.A., Inc. Class A (sub. vtg.) (a) | 505,000 | 10,110,100 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Steven Madden Ltd. (a) | 190,000 | $ 3,243,300 | |
Warnaco Group, Inc. (a) | 70,000 | 2,512,300 | |
17,074,246 | |||
TOTAL CONSUMER DISCRETIONARY | 143,178,489 | ||
CONSUMER STAPLES - 4.2% | |||
Food & Staples Retailing - 1.6% | |||
The Great Atlantic & Pacific Tea Co. (a)(d) | 235,000 | 7,019,450 | |
The Pantry, Inc. (a)(d) | 471,000 | 13,687,260 | |
20,706,710 | |||
Food Products - 2.1% | |||
Chiquita Brands International, Inc. (a) | 171,000 | 3,194,280 | |
Corn Products International, Inc. | 360,000 | 12,168,000 | |
Diamond Foods, Inc. | 165,400 | 3,137,638 | |
Hain Celestial Group, Inc. (a) | 140,000 | 3,780,000 | |
Lighthouse Caledonia ASA (d) | 60,817 | 46,659 | |
Marine Harvest ASA (a) | 7,155,000 | 3,854,049 | |
26,180,626 | |||
Personal Products - 0.5% | |||
Bare Escentuals, Inc. (a) | 75,000 | 1,788,000 | |
Physicians Formula Holdings, Inc. (a) | 128,100 | 1,214,388 | |
Prestige Brands Holdings, Inc. (a) | 469,674 | 3,508,465 | |
6,510,853 | |||
TOTAL CONSUMER STAPLES | 53,398,189 | ||
ENERGY - 12.5% | |||
Energy Equipment & Services - 3.4% | |||
Exterran Holdings, Inc. (a) | 85,000 | 5,545,400 | |
Hornbeck Offshore Services, Inc. (a) | 106,617 | 4,123,946 | |
NATCO Group, Inc. Class A (a) | 64,219 | 2,939,946 | |
Oil States International, Inc. (a) | 189,760 | 6,652,986 | |
Superior Energy Services, Inc. (a) | 590,000 | 23,653,100 | |
42,915,378 | |||
Oil, Gas & Consumable Fuels - 9.1% | |||
Alpha Natural Resources, Inc. (a) | 114,600 | 3,834,516 | |
Cabot Oil & Gas Corp. | 320,000 | 12,380,800 | |
Forest Oil Corp. (a) | 260,300 | 11,770,766 | |
Common Stocks - continued | |||
Shares | Value | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Mariner Energy, Inc. (a) | 590,000 | $ 14,785,400 | |
Petrohawk Energy Corp. (a) | 790,000 | 12,442,500 | |
Petroleum Development Corp. (a) | 127,622 | 7,338,265 | |
Southwestern Energy Co. (a) | 320,000 | 17,891,200 | |
Tesoro Corp. | 857,600 | 33,489,278 | |
Western Refining, Inc. | 80,000 | 1,708,000 | |
115,640,725 | |||
TOTAL ENERGY | 158,556,103 | ||
FINANCIALS - 23.6% | |||
Capital Markets - 2.1% | |||
American Capital Strategies Ltd. (d) | 98,700 | 3,471,279 | |
KBW, Inc. (a)(d) | 395,000 | 11,735,450 | |
MF Global Ltd. | 185,000 | 5,559,250 | |
TradeStation Group, Inc. (a) | 508,300 | 5,540,470 | |
26,306,449 | |||
Commercial Banks - 4.1% | |||
Boston Private Financial Holdings, Inc. (d) | 655,200 | 14,958,216 | |
Center Financial Corp., California | 224,052 | 2,594,522 | |
East West Bancorp, Inc. | 28,800 | 692,928 | |
First State Bancorp. | 483,500 | 6,072,760 | |
Investors Bancorp, Inc. (a)(d) | 190,000 | 2,897,500 | |
South Financial Group, Inc. | 370,000 | 6,393,600 | |
Sterling Bancshares, Inc. | 235,000 | 2,357,050 | |
UMB Financial Corp. | 215,000 | 9,057,950 | |
Wintrust Financial Corp. | 191,260 | 7,275,530 | |
52,300,056 | |||
Consumer Finance - 0.3% | |||
Advanta Corp. Class B | 97,500 | 974,025 | |
Dollar Financial Corp. (a) | 135,000 | 3,399,300 | |
4,373,325 | |||
Diversified Financial Services - 0.7% | |||
Interactive Brokers Group, Inc. | 135,000 | 4,699,350 | |
MarketAxess Holdings, Inc. (a) | 400,000 | 3,780,000 | |
8,479,350 | |||
Insurance - 10.2% | |||
American Equity Investment Life Holding Co. | 1,289,506 | 10,664,215 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Insurance - continued | |||
Aspen Insurance Holdings Ltd. | 360,200 | $ 10,164,844 | |
Delphi Financial Group, Inc. Class A | 277,850 | 8,718,933 | |
HCC Insurance Holdings, Inc. | 390,920 | 10,891,031 | |
Infinity Property & Casualty Corp. | 235,000 | 9,369,450 | |
IPC Holdings Ltd. | 573,740 | 14,762,330 | |
Max Capital Group Ltd. | 175,000 | 4,968,250 | |
National Financial Partners Corp. (d) | 471,300 | 17,013,930 | |
Navigators Group, Inc. (a) | 104,862 | 6,053,683 | |
PartnerRe Ltd. | 50,000 | 3,964,000 | |
Platinum Underwriters Holdings Ltd. | 329,700 | 11,127,375 | |
United America Indemnity Ltd. Class A (a) | 142,922 | 2,931,330 | |
Willis Group Holdings Ltd. | 195,000 | 6,871,800 | |
Zenith National Insurance Corp. | 294,000 | 11,707,080 | |
129,208,251 | |||
Real Estate Investment Trusts - 3.0% | |||
Annaly Capital Management, Inc. | 577,000 | 11,378,440 | |
Chimera Investment Corp. | 259,400 | 4,967,510 | |
Developers Diversified Realty Corp. | 30,000 | 1,234,500 | |
MFA Mortgage Investments, Inc. | 2,028,800 | 20,693,760 | |
38,274,210 | |||
Real Estate Management & Development - 1.2% | |||
Jones Lang LaSalle, Inc. (d) | 193,000 | 15,015,400 | |
Thrifts & Mortgage Finance - 2.0% | |||
Downey Financial Corp. (d) | 65,000 | 2,242,500 | |
Farmer Mac Class C (non-vtg.) | 115,000 | 3,164,800 | |
FirstFed Financial Corp. (a)(d) | 100,000 | 4,195,000 | |
Home Federal Bancorp, Inc. | 270,300 | 2,878,695 | |
Meridian Interstate Bancorp, Inc. (a)(d) | 191,100 | 1,834,560 | |
United Financial Bancorp, Inc. | 194,600 | 2,169,790 | |
Washington Federal, Inc. | 305,000 | 7,448,100 | |
Westfield Financial, Inc. | 125,000 | 1,280,000 | |
25,213,445 | |||
TOTAL FINANCIALS | 299,170,486 | ||
HEALTH CARE - 5.0% | |||
Biotechnology - 0.5% | |||
Theravance, Inc. (a) | 300,000 | 5,919,000 | |
Health Care Equipment & Supplies - 0.3% | |||
Zoll Medical Corp. (a) | 133,200 | 3,551,112 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - 2.7% | |||
Air Methods Corp. (a) | 209,167 | $ 9,596,582 | |
AMERIGROUP Corp. (a) | 245,000 | 9,192,400 | |
Owens & Minor, Inc. | 75,000 | 3,099,000 | |
Pediatrix Medical Group, Inc. (a) | 110,000 | 7,489,900 | |
ResCare, Inc. (a) | 75,000 | 1,677,750 | |
Universal American Financial Corp. (a) | 150,000 | 3,139,500 | |
34,195,132 | |||
Life Sciences Tools & Services - 1.3% | |||
Kendle International, Inc. (a) | 100,000 | 4,239,000 | |
PerkinElmer, Inc. | 100,000 | 2,489,000 | |
Pharmaceutical Product Development, Inc. | 220,000 | 9,539,200 | |
16,267,200 | |||
Pharmaceuticals - 0.2% | |||
Perrigo Co. | 100,000 | 3,084,000 | |
TOTAL HEALTH CARE | 63,016,444 | ||
INDUSTRIALS - 14.0% | |||
Aerospace & Defense - 2.1% | |||
AAR Corp. (a) | 182,300 | 5,370,558 | |
DRS Technologies, Inc. | 144,000 | 7,728,480 | |
Hexcel Corp. (a) | 250,200 | 5,461,866 | |
Orbital Sciences Corp. (a) | 325,000 | 7,572,500 | |
26,133,404 | |||
Air Freight & Logistics - 1.1% | |||
Hub Group, Inc. Class A (a) | 220,000 | 6,408,600 | |
Park-Ohio Holdings Corp. (a) | 356,646 | 7,974,605 | |
14,383,205 | |||
Airlines - 0.3% | |||
AirTran Holdings, Inc. (a)(d) | 440,000 | 3,797,200 | |
Commercial Services & Supplies - 2.3% | |||
FTI Consulting, Inc. (a)(d) | 360,000 | 19,911,600 | |
Interface, Inc. Class A | 148,590 | 2,371,496 | |
Navigant Consulting, Inc. (a) | 125,000 | 1,480,000 | |
Team, Inc. (a) | 176,256 | 5,296,493 | |
29,059,589 | |||
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Construction & Engineering - 3.1% | |||
Shaw Group, Inc. (a)(d) | 418,000 | $ 23,617,000 | |
URS Corp. (a) | 351,576 | 15,434,186 | |
39,051,186 | |||
Electrical Equipment - 1.2% | |||
Belden, Inc. | 345,000 | 14,593,500 | |
Machinery - 2.1% | |||
Accuride Corp. (a) | 921,000 | 5,774,670 | |
AGCO Corp. (a) | 65,000 | 3,914,300 | |
Astec Industries, Inc. (a) | 195,000 | 6,019,650 | |
Commercial Vehicle Group, Inc. (a) | 200,000 | 2,000,000 | |
Flow International Corp. (a) | 215,000 | 2,003,800 | |
Force Protection, Inc. (a)(d) | 910,000 | 3,721,900 | |
Manitowoc Co., Inc. | 89,940 | 3,428,513 | |
Titan Machinery, Inc. | 20,000 | 329,600 | |
27,192,433 | |||
Road & Rail - 0.9% | |||
J.B. Hunt Transport Services, Inc. (d) | 265,000 | 8,241,500 | |
YRC Worldwide, Inc. (a)(d) | 195,000 | 3,570,450 | |
11,811,950 | |||
Trading Companies & Distributors - 0.9% | |||
Kaman Corp. | 223,822 | 6,611,702 | |
Rush Enterprises, Inc.: | |||
Class A (a) | 247,500 | 4,153,050 | |
Class B (a) | 25,000 | 392,500 | |
11,157,252 | |||
TOTAL INDUSTRIALS | 177,179,719 | ||
INFORMATION TECHNOLOGY - 13.5% | |||
Communications Equipment - 2.1% | |||
Arris Group, Inc. (a)(d) | 1,735,000 | 15,250,650 | |
Polycom, Inc. (a) | 470,000 | 11,867,500 | |
27,118,150 | |||
Computers & Peripherals - 0.2% | |||
Data Domain, Inc. (d) | 60,000 | 1,352,400 | |
Quantum Corp. (a) | 725,000 | 1,667,500 | |
3,019,900 | |||
Electronic Equipment & Instruments - 3.9% | |||
Amphenol Corp. Class A | 40,000 | 1,597,600 | |
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - continued | |||
Ingram Micro, Inc. Class A (a) | 762,700 | $ 13,560,806 | |
Insight Enterprises, Inc. (a) | 710,600 | 12,272,062 | |
Itron, Inc. (a) | 60,000 | 4,944,000 | |
Mettler-Toledo International, Inc. (a) | 98,700 | 9,800,910 | |
Vishay Intertechnology, Inc. (a) | 677,491 | 7,106,881 | |
49,282,259 | |||
Internet Software & Services - 0.7% | |||
j2 Global Communications, Inc. (a) | 430,800 | 9,438,828 | |
IT Services - 2.3% | |||
CACI International, Inc. Class A (a) | 60,000 | 2,615,400 | |
ManTech International Corp. Class A (a) | 105,000 | 4,294,500 | |
Ness Technologies, Inc. (a) | 215,200 | 1,977,688 | |
Telvent GIT SA | 856,000 | 17,376,800 | |
VeriFone Holdings, Inc. (a)(d) | 140,000 | 2,739,800 | |
29,004,188 | |||
Semiconductors & Semiconductor Equipment - 1.9% | |||
Entegris, Inc. (a) | 500,000 | 3,850,000 | |
FormFactor, Inc. (a) | 55,000 | 1,332,100 | |
MKS Instruments, Inc. (a) | 208,900 | 3,885,540 | |
Pericom Semiconductor Corp. (a) | 80,000 | 1,084,800 | |
Skyworks Solutions, Inc. (a) | 300,000 | 2,415,000 | |
TriQuint Semiconductor, Inc. (a) | 600,000 | 2,844,000 | |
Zoran Corp. (a) | 755,000 | 8,909,000 | |
24,320,440 | |||
Software - 2.4% | |||
Blackbaud, Inc. | 265,000 | 7,332,550 | |
Quest Software, Inc. (a) | 790,000 | 11,810,500 | |
THQ, Inc. (a) | 590,000 | 10,625,900 | |
29,768,950 | |||
TOTAL INFORMATION TECHNOLOGY | 171,952,715 | ||
MATERIALS - 7.7% | |||
Chemicals - 2.3% | |||
Airgas, Inc. | 170,000 | 7,889,700 | |
CF Industries Holdings, Inc. | 140,000 | 14,970,200 | |
H.B. Fuller Co. | 205,000 | 4,255,800 | |
Tronox, Inc. Class A | 350,000 | 2,555,000 | |
29,670,700 | |||
Common Stocks - continued | |||
Shares | Value | ||
MATERIALS - continued | |||
Containers & Packaging - 0.2% | |||
Smurfit-Stone Container Corp. (a) | 240,000 | $ 2,277,600 | |
Metals & Mining - 5.2% | |||
Carpenter Technology Corp. | 480,000 | 29,587,200 | |
Compass Minerals International, Inc. (d) | 356,466 | 15,121,288 | |
Titanium Metals Corp. | 120,000 | 2,608,800 | |
Yamana Gold, Inc. | 1,107,474 | 18,374,214 | |
65,691,502 | |||
TOTAL MATERIALS | 97,639,802 | ||
TELECOMMUNICATION SERVICES - 0.7% | |||
Diversified Telecommunication Services - 0.7% | |||
Cincinnati Bell, Inc. (a) | 500,000 | 1,940,000 | |
Level 3 Communications, Inc. (a) | 800,000 | 2,752,000 | |
Time Warner Telecom, Inc. Class A (sub. vtg.) (a) | 230,000 | 4,020,400 | |
8,712,400 | |||
UTILITIES - 3.2% | |||
Electric Utilities - 1.2% | |||
ITC Holdings Corp. (d) | 189,000 | 9,986,760 | |
Westar Energy, Inc. | 200,000 | 4,872,000 | |
14,858,760 | |||
Independent Power Producers & Energy Traders - 0.9% | |||
Dynegy, Inc. Class A (a) | 705,000 | 4,949,100 | |
NRG Energy, Inc. (a) | 168,000 | 6,483,120 | |
11,432,220 | |||
Multi-Utilities - 1.1% | |||
CMS Energy Corp. | 892,500 | 13,985,475 | |
TOTAL UTILITIES | 40,276,455 | ||
TOTAL COMMON STOCKS (Cost $1,224,387,430) | 1,213,080,802 | ||
Money Market Funds - 11.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 55,087,550 | $ 55,087,550 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 95,440,430 | 95,440,430 | |
TOTAL MONEY MARKET FUNDS (Cost $150,527,980) | 150,527,980 | ||
TOTAL INVESTMENT PORTFOLIO - 107.6% (Cost $1,374,915,410) | 1,363,608,782 | ||
NET OTHER ASSETS - (7.6)% | (96,246,400) | ||
NET ASSETS - 100% | $ 1,267,362,382 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,069,997 |
Fidelity Securities Lending Cash Central Fund | 527,171 |
Total | $ 1,597,168 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $96,848,669) - See accompanying schedule: Unaffiliated issuers (cost $1,224,387,430) | $ 1,213,080,802 | |
Fidelity Central Funds (cost $150,527,980) | 150,527,980 | |
Total Investments (cost $1,374,915,410) | $ 1,363,608,782 | |
Receivable for investments sold | 7,985,390 | |
Receivable for fund shares sold | 3,012,143 | |
Dividends receivable | 302,418 | |
Distributions receivable from Fidelity Central Funds | 376,852 | |
Prepaid expenses | 3,991 | |
Receivable from investment adviser for expense reductions | 9,994 | |
Other receivables | 1,670 | |
Total assets | 1,375,301,240 | |
Liabilities | ||
Payable for investments purchased | $ 8,962,609 | |
Payable for fund shares redeemed | 2,169,504 | |
Accrued management fee | 919,002 | |
Distribution fees payable | 59,043 | |
Other affiliated payables | 321,337 | |
Other payables and accrued expenses | 66,933 | |
Collateral on securities loaned, at value | 95,440,430 | |
Total liabilities | 107,938,858 | |
Net Assets | $ 1,267,362,382 | |
Net Assets consist of: | ||
Paid in capital | $ 1,264,762,568 | |
Accumulated net investment loss | (779,787) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,686,229 | |
Net unrealized appreciation (depreciation) on investments | (11,306,628) | |
Net Assets | $ 1,267,362,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.64 | |
Maximum offering price per share (100/94.25 of $12.64) | $ 13.41 | |
Class T: | $ 12.57 | |
Maximum offering price per share (100/96.50 of $12.57) | $ 13.03 | |
Class B: | $ 12.45 | |
Class C: | $ 12.45 | |
Small Cap Value: | $ 12.71 | |
Institutional Class: | $ 12.71 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 5,828,806 | |
Interest | 2,368 | |
Income from Fidelity Central Funds (including $527,171 from security lending) | 1,597,168 | |
Total income | 7,428,342 | |
Expenses | ||
Management fee | $ 4,783,096 | |
Performance adjustment | 971,305 | |
Transfer agent fees | 1,733,442 | |
Distribution fees | 410,742 | |
Accounting and security lending fees | 223,101 | |
Custodian fees and expenses | 20,218 | |
Independent trustees' compensation | 2,839 | |
Registration fees | 70,480 | |
Audit | 30,595 | |
Legal | 3,797 | |
Miscellaneous | 40,960 | |
Total expenses before reductions | 8,290,575 | |
Expense reductions | (82,446) | 8,208,129 |
Net investment income (loss) | (779,787) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 30,130,520 | |
Foreign currency transactions | 91,090 | |
Total net realized gain (loss) | 30,221,610 | |
Change in net unrealized appreciation (depreciation) on investment securities | (145,320,911) | |
Net gain (loss) | (115,099,301) | |
Net increase (decrease) in net assets resulting from operations | $ (115,879,088) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (779,787) | $ (2,821,365) |
Net realized gain (loss) | 30,221,610 | 58,301,578 |
Change in net unrealized appreciation (depreciation) | (145,320,911) | 108,216,572 |
Net increase (decrease) in net assets resulting | (115,879,088) | 163,696,785 |
Distributions to shareholders from net realized gain | (53,457,458) | (55,419,267) |
Share transactions - net increase (decrease) | 32,092,403 | 206,517,786 |
Redemption fees | 98,489 | 174,668 |
Total increase (decrease) in net assets | (137,145,654) | 314,969,972 |
Net Assets | ||
Beginning of period | 1,404,508,036 | 1,089,538,064 |
End of period (including accumulated net investment loss of $779,787 and $0, respectively) | $ 1,267,362,382 | $ 1,404,508,036 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.34 | $ 13.17 | $ 12.80 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.02) | (.06) | (.03) | (.04) |
Net realized and unrealized gain (loss) | (1.15) | 1.90 | .74 | 2.84 |
Total from investment operations | (1.17) | 1.84 | .71 | 2.80 |
Distributions from net investment income | - | - | - | (.01) |
Distributions from net realized gain | (.53) | (.67) | (.35) | - |
Total distributions | (.53) | (.67) | (.35) | (.01) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.64 | $ 14.34 | $ 13.17 | $ 12.80 |
Total Return B, C, D | (8.41)% | 14.59% | 5.72% | 28.06% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 1.46% A | 1.45% | 1.51% | 1.46% A |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.44% A |
Expenses net of all reductions | 1.40% A | 1.40% | 1.36% | 1.38% A |
Net investment income (loss) | (.30)% A | (.44)% | (.24)% | (.46)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 56,041 | $ 61,357 | $ 39,931 | $ 9,390 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.28 | $ 13.13 | $ 12.78 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.04) | (.10) | (.07) | (.06) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.83 |
Total from investment operations | (1.18) | 1.80 | .67 | 2.77 |
Distributions from net realized gain | (.53) | (.65) | (.33) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.57 | $ 14.28 | $ 13.13 | $ 12.78 |
Total Return B, C, D | (8.54)% | 14.34% | 5.47% | 27.80% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 1.71% A | 1.66% | 1.67% | 1.72% A |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.68% A |
Expenses net of all reductions | 1.65% A | 1.65% | 1.61% | 1.62% A |
Net investment income (loss) | (.56)% A | (.69)% | (.49)% | (.70)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 37,485 | $ 51,518 | $ 45,460 | $ 12,725 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.19 | $ 13.07 | $ 12.73 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.07) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.82 |
Total from investment operations | (1.21) | 1.73 | .61 | 2.72 |
Distributions from net realized gain | (.53) | (.61) | (.28) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.45 | $ 14.19 | $ 13.07 | $ 12.73 |
Total Return B, C, D | (8.81)% | 13.78% | 4.97% | 27.30% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 2.21% A | 2.20% | 2.26% | 2.24% A |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% A |
Expenses net of all reductions | 2.15% A | 2.15% | 2.11% | 2.13% A |
Net investment income (loss) | (1.06)% A | (1.19)% | (.99)% | (1.21)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 9,681 | $ 12,075 | $ 10,214 | $ 3,931 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.19 | $ 13.07 | $ 12.74 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.07) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.83 |
Total from investment operations | (1.21) | 1.73 | .61 | 2.73 |
Distributions from net realized gain | (.53) | (.61) | (.29) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.45 | $ 14.19 | $ 13.07 | $ 12.74 |
Total Return B, C, D | (8.81)% | 13.77% | 4.92% | 27.40% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 2.21% A | 2.20% | 2.22% | 2.17% A |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.17% A |
Expenses net of all reductions | 2.15% A | 2.15% | 2.11% | 2.11% A |
Net investment income (loss) | (1.06)% A | (1.19)% | (.99)% | (1.19)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 26,598 | $ 34,155 | $ 26,791 | $ 11,732 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Value
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | - I | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (1.16) | 1.91 | .74 | 2.84 |
Total from investment operations | (1.16) | 1.89 | .75 | 2.83 |
Distributions from net investment income | - | - | (.01) | (.01) |
Distributions from net realized gain | (.56) | (.68) | (.36) | - |
Total distributions | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in | - I | - I | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (8.34)% | 14.96% | 6.07% | 28.36% |
Ratios to Average Net Assets E, H | ||||
Expenses before reductions | 1.16% A | 1.11% | 1.09% | 1.05% A |
Expenses net of fee waivers, if any | 1.16% A | 1.11% | 1.09% | 1.05% A |
Expenses net of all reductions | 1.15% A | 1.11% | 1.06% | .99% A |
Net investment income (loss) | (.05)% A | (.15)% | .06% | (.08)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 1,126,876 | $ 1,233,808 | $ 957,720 | $ 582,689 |
Portfolio turnover rate F | 65% A | 67% | 93% | 60% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period November 3, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | - I | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (1.16) | 1.91 | .74 | 2.84 |
Total from investment operations | (1.16) | 1.89 | .75 | 2.83 |
Distributions from net investment income | - | - | (.01) | (.01) |
Distributions from net realized gain | (.56) | (.68) | (.36) | - |
Total distributions | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (8.33)% | 14.99% | 6.08% | 28.36% |
Ratios to Average Net Assets E, H | ||||
Expenses before reductions | 1.15% A | 1.10% | 1.08% | 1.07% A |
Expenses net of fee waivers, if any | 1.15% A | 1.10% | 1.08% | 1.07% A |
Expenses net of all reductions | 1.15% A | 1.10% | 1.05% | 1.01% A |
Net investment income (loss) | (.05)% A | (.13)% | .08% | (.10)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 10,681 | $ 11,594 | $ 9,422 | $ 3,761 |
Portfolio turnover rate F | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period November 3, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Value Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Small Cap Value and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 166,044,860 |
Unrealized depreciation | (178,526,118) |
Net unrealized appreciation (depreciation) | $ (12,481,258) |
Cost for federal income tax purposes | $ 1,376,090,040 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $428,542,771 and $477,603,433, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 the retail class of the Fund, Small Cap Value as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .85% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 77,135 | $ 9,140 |
Class T | .25% | .25% | 115,376 | - |
Class B | .75% | .25% | 56,978 | 42,734 |
Class C | .75% | .25% | 161,253 | 34,454 |
$ 410,742 | $ 86,328 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 28,666 |
Class T | 5,751 |
Class B* | 9,111 |
Class C* | 1,258 |
$ 44,786 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for Small Cap Value.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 94,193 | .30 |
Class T | 70,252 | .30 |
Class B | 17,520 | .31 |
Class C | 49,267 | .30 |
Small Cap Value | 1,488,552 | .25 |
Institutional Class | 13,658 | .24 |
$ 1,733,442 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $8,865 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,869 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation
Semiannual Report
8. Security Lending - continued
to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.40% | $ 18,399 |
Class T | 1.65% | 12,738 |
Class B | 2.15% | 3,326 |
Class C | 2.15% | 8,943 |
$ 43,406 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,175 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses.
During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Class A | $ 347 |
Small Cap Value | 37,389 |
Institutional Class | 129 |
$ 37,865 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 2,334,230 | $ 2,137,128 |
Class T | 1,800,458 | 2,317,701 |
Class B | 442,697 | 493,632 |
Class C | 1,258,476 | 1,276,323 |
Small Cap Value | 47,176,108 | 48,691,674 |
Institutional Class | 445,489 | 502,809 |
Total | $ 53,457,458 | $ 55,419,267 |
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended January 31, | Year ended | Six months ended January 31, | Year ended | |
Class A | ||||
Shares sold | 1,037,790 | 2,083,427 | $ 14,370,246 | $ 29,477,855 |
Reinvestment of distributions | 158,451 | 153,067 | 2,181,136 | 1,967,811 |
Shares redeemed | (1,039,685) | (990,255) | (14,135,562) | (13,986,913) |
Net increase (decrease) | 156,556 | 1,246,239 | $ 2,415,820 | $ 17,458,753 |
Class T | ||||
Shares sold | 333,957 | 1,416,878 | $ 4,534,972 | $ 19,764,686 |
Reinvestment of distributions | 127,052 | 158,416 | 1,740,318 | 2,031,495 |
Shares redeemed | (1,086,149) | (1,429,554) | (14,795,703) | (20,059,646) |
Net increase (decrease) | (625,140) | 145,740 | $ (8,520,413) | $ 1,736,535 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended January 31, | Year ended | Six months ended January 31, | Year ended | |
Class B | ||||
Shares sold | 66,563 | 297,938 | $ 904,855 | $ 4,153,087 |
Reinvestment of distributions | 29,083 | 34,686 | 395,378 | 444,445 |
Shares redeemed | (169,279) | (263,033) | (2,254,867) | (3,714,165) |
Net increase (decrease) | (73,633) | 69,591 | $ (954,634) | $ 883,367 |
Class C | ||||
Shares sold | 288,574 | 834,910 | $ 3,916,465 | $ 11,698,988 |
Reinvestment of distributions | 82,042 | 84,926 | 1,115,170 | 1,089,287 |
Shares redeemed | (641,818) | (562,438) | (8,548,816) | (7,834,552) |
Net increase (decrease) | (271,202) | 357,398 | $ (3,517,181) | $ 4,953,723 |
Small Cap Value | ||||
Shares sold | 18,361,917 | 42,235,359 | $ 252,244,988 | $ 595,504,607 |
Reinvestment of distributions | 3,344,768 | 3,617,365 | 46,241,128 | 46,609,140 |
Shares redeemed | (18,555,534) | (32,779,622) | (256,328,053) | (461,808,869) |
Net increase (decrease) | 3,151,151 | 13,073,102 | $ 42,158,063 | $ 180,304,878 |
Institutional Class | ||||
Shares sold | 224,981 | 309,983 | $ 3,126,200 | $ 4,413,286 |
Reinvestment of distributions | 21,655 | 23,286 | 299,380 | 300,279 |
Shares redeemed | (209,757) | (242,217) | (2,914,832) | (3,533,035) |
Net increase (decrease) | 36,879 | 91,052 | $ 510,748 | $ 1,180,530 |
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
ASCV-USAN-0308
1.803737.104
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Small Cap Value
Fund - Institutional Class
Semiannual Report
January 31, 2008
Institutional Class
is a class of Fidelity®
Small Cap Value Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (August 1, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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.
Semiannual Report
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 915.90 | $ 6.74 |
Hypothetical A | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | |||
Actual | $ 1,000.00 | $ 914.60 | $ 7.94 |
Hypothetical A | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | |||
Actual | $ 1,000.00 | $ 911.90 | $ 10.33 |
Hypothetical A | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | |||
Actual | $ 1,000.00 | $ 911.90 | $ 10.33 |
Hypothetical A | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Small Cap Value | |||
Actual | $ 1,000.00 | $ 916.60 | $ 5.59 |
Hypothetical A | $ 1,000.00 | $ 1,019.30 | $ 5.89 |
Institutional Class | |||
Actual | $ 1,000.00 | $ 916.70 | $ 5.54 |
Hypothetical A | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annualized | |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Small Cap Value | 1.16% |
Institutional Class | 1.15% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Tesoro Corp. | 2.6 | 3.2 |
Carpenter Technology Corp. | 2.3 | 2.4 |
Superior Energy Services, Inc. | 1.9 | 0.8 |
Shaw Group, Inc. | 1.9 | 1.6 |
MFA Mortgage Investments, Inc. | 1.6 | 0.0 |
FTI Consulting, Inc. | 1.6 | 1.1 |
Yamana Gold, Inc. | 1.5 | 0.0 |
Southwestern Energy Co. | 1.4 | 0.9 |
Telvent GIT SA | 1.4 | 1.6 |
National Financial Partners Corp. | 1.4 | 1.5 |
17.6 | ||
Top Five Market Sectors as of January 31, 2008 | ||
% of fund's | % of fund's net assets | |
Financials | 23.6 | 23.1 |
Industrials | 14.0 | 17.0 |
Information Technology | 13.5 | 17.1 |
Energy | 12.5 | 10.6 |
Consumer Discretionary | 11.3 | 11.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2008 * | As of July 31, 2007 ** | ||||||
![]() | Stocks 95.7% | ![]() | Stocks 98.1% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 8.1% | ** Foreign investments | 7.6% |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.7% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 11.3% | |||
Auto Components - 0.9% | |||
Aftermarket Technology Corp. (a) | 445,000 | $ 11,307,450 | |
Hotels, Restaurants & Leisure - 1.2% | |||
Pinnacle Entertainment, Inc. (a)(d) | 349,999 | 6,387,482 | |
Red Robin Gourmet Burgers, Inc. (a) | 130,000 | 4,534,400 | |
Wyndham Worldwide Corp. | 175,000 | 4,123,000 | |
15,044,882 | |||
Household Durables - 2.1% | |||
Ethan Allen Interiors, Inc. (d) | 210,300 | 6,508,785 | |
Jarden Corp. (a)(d) | 669,600 | 16,766,784 | |
Ryland Group, Inc. | 80,000 | 2,696,800 | |
25,972,369 | |||
Leisure Equipment & Products - 1.7% | |||
Arctic Cat, Inc. | 190,000 | 1,757,500 | |
Brunswick Corp. | 110,300 | 2,094,597 | |
Callaway Golf Co. | 325,000 | 5,824,000 | |
MarineMax, Inc. (a) | 30,000 | 464,100 | |
RC2 Corp. (a) | 614,555 | 11,541,343 | |
21,681,540 | |||
Media - 0.8% | |||
Charter Communications, Inc. Class A (a) | 1,250,000 | 1,462,500 | |
Sinclair Broadcast Group, Inc. Class A | 1,030,500 | 9,274,500 | |
10,737,000 | |||
Specialty Retail - 3.3% | |||
Advance Auto Parts, Inc. | 300,000 | 10,704,000 | |
Asbury Automotive Group, Inc. | 385,000 | 5,459,300 | |
Build-A-Bear Workshop, Inc. (a) | 84,063 | 1,145,779 | |
Collective Brands, Inc. (a) | 275,000 | 4,845,500 | |
Gymboree Corp. (a) | 165,000 | 6,306,300 | |
Lithia Motors, Inc. Class A (sub. vtg.) (d) | 54,000 | 825,660 | |
Select Comfort Corp. (a)(d) | 665,000 | 5,226,900 | |
Shoe Carnival, Inc. (a) | 75,258 | 1,112,313 | |
The Men's Wearhouse, Inc. | 225,000 | 5,735,250 | |
41,361,002 | |||
Textiles, Apparel & Luxury Goods - 1.3% | |||
FGX International Ltd. | 119,658 | 1,208,546 | |
Skechers U.S.A., Inc. Class A (sub. vtg.) (a) | 505,000 | 10,110,100 | |
Common Stocks - continued | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Steven Madden Ltd. (a) | 190,000 | $ 3,243,300 | |
Warnaco Group, Inc. (a) | 70,000 | 2,512,300 | |
17,074,246 | |||
TOTAL CONSUMER DISCRETIONARY | 143,178,489 | ||
CONSUMER STAPLES - 4.2% | |||
Food & Staples Retailing - 1.6% | |||
The Great Atlantic & Pacific Tea Co. (a)(d) | 235,000 | 7,019,450 | |
The Pantry, Inc. (a)(d) | 471,000 | 13,687,260 | |
20,706,710 | |||
Food Products - 2.1% | |||
Chiquita Brands International, Inc. (a) | 171,000 | 3,194,280 | |
Corn Products International, Inc. | 360,000 | 12,168,000 | |
Diamond Foods, Inc. | 165,400 | 3,137,638 | |
Hain Celestial Group, Inc. (a) | 140,000 | 3,780,000 | |
Lighthouse Caledonia ASA (d) | 60,817 | 46,659 | |
Marine Harvest ASA (a) | 7,155,000 | 3,854,049 | |
26,180,626 | |||
Personal Products - 0.5% | |||
Bare Escentuals, Inc. (a) | 75,000 | 1,788,000 | |
Physicians Formula Holdings, Inc. (a) | 128,100 | 1,214,388 | |
Prestige Brands Holdings, Inc. (a) | 469,674 | 3,508,465 | |
6,510,853 | |||
TOTAL CONSUMER STAPLES | 53,398,189 | ||
ENERGY - 12.5% | |||
Energy Equipment & Services - 3.4% | |||
Exterran Holdings, Inc. (a) | 85,000 | 5,545,400 | |
Hornbeck Offshore Services, Inc. (a) | 106,617 | 4,123,946 | |
NATCO Group, Inc. Class A (a) | 64,219 | 2,939,946 | |
Oil States International, Inc. (a) | 189,760 | 6,652,986 | |
Superior Energy Services, Inc. (a) | 590,000 | 23,653,100 | |
42,915,378 | |||
Oil, Gas & Consumable Fuels - 9.1% | |||
Alpha Natural Resources, Inc. (a) | 114,600 | 3,834,516 | |
Cabot Oil & Gas Corp. | 320,000 | 12,380,800 | |
Forest Oil Corp. (a) | 260,300 | 11,770,766 | |
Common Stocks - continued | |||
Shares | Value | ||
ENERGY - continued | |||
Oil, Gas & Consumable Fuels - continued | |||
Mariner Energy, Inc. (a) | 590,000 | $ 14,785,400 | |
Petrohawk Energy Corp. (a) | 790,000 | 12,442,500 | |
Petroleum Development Corp. (a) | 127,622 | 7,338,265 | |
Southwestern Energy Co. (a) | 320,000 | 17,891,200 | |
Tesoro Corp. | 857,600 | 33,489,278 | |
Western Refining, Inc. | 80,000 | 1,708,000 | |
115,640,725 | |||
TOTAL ENERGY | 158,556,103 | ||
FINANCIALS - 23.6% | |||
Capital Markets - 2.1% | |||
American Capital Strategies Ltd. (d) | 98,700 | 3,471,279 | |
KBW, Inc. (a)(d) | 395,000 | 11,735,450 | |
MF Global Ltd. | 185,000 | 5,559,250 | |
TradeStation Group, Inc. (a) | 508,300 | 5,540,470 | |
26,306,449 | |||
Commercial Banks - 4.1% | |||
Boston Private Financial Holdings, Inc. (d) | 655,200 | 14,958,216 | |
Center Financial Corp., California | 224,052 | 2,594,522 | |
East West Bancorp, Inc. | 28,800 | 692,928 | |
First State Bancorp. | 483,500 | 6,072,760 | |
Investors Bancorp, Inc. (a)(d) | 190,000 | 2,897,500 | |
South Financial Group, Inc. | 370,000 | 6,393,600 | |
Sterling Bancshares, Inc. | 235,000 | 2,357,050 | |
UMB Financial Corp. | 215,000 | 9,057,950 | |
Wintrust Financial Corp. | 191,260 | 7,275,530 | |
52,300,056 | |||
Consumer Finance - 0.3% | |||
Advanta Corp. Class B | 97,500 | 974,025 | |
Dollar Financial Corp. (a) | 135,000 | 3,399,300 | |
4,373,325 | |||
Diversified Financial Services - 0.7% | |||
Interactive Brokers Group, Inc. | 135,000 | 4,699,350 | |
MarketAxess Holdings, Inc. (a) | 400,000 | 3,780,000 | |
8,479,350 | |||
Insurance - 10.2% | |||
American Equity Investment Life Holding Co. | 1,289,506 | 10,664,215 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Insurance - continued | |||
Aspen Insurance Holdings Ltd. | 360,200 | $ 10,164,844 | |
Delphi Financial Group, Inc. Class A | 277,850 | 8,718,933 | |
HCC Insurance Holdings, Inc. | 390,920 | 10,891,031 | |
Infinity Property & Casualty Corp. | 235,000 | 9,369,450 | |
IPC Holdings Ltd. | 573,740 | 14,762,330 | |
Max Capital Group Ltd. | 175,000 | 4,968,250 | |
National Financial Partners Corp. (d) | 471,300 | 17,013,930 | |
Navigators Group, Inc. (a) | 104,862 | 6,053,683 | |
PartnerRe Ltd. | 50,000 | 3,964,000 | |
Platinum Underwriters Holdings Ltd. | 329,700 | 11,127,375 | |
United America Indemnity Ltd. Class A (a) | 142,922 | 2,931,330 | |
Willis Group Holdings Ltd. | 195,000 | 6,871,800 | |
Zenith National Insurance Corp. | 294,000 | 11,707,080 | |
129,208,251 | |||
Real Estate Investment Trusts - 3.0% | |||
Annaly Capital Management, Inc. | 577,000 | 11,378,440 | |
Chimera Investment Corp. | 259,400 | 4,967,510 | |
Developers Diversified Realty Corp. | 30,000 | 1,234,500 | |
MFA Mortgage Investments, Inc. | 2,028,800 | 20,693,760 | |
38,274,210 | |||
Real Estate Management & Development - 1.2% | |||
Jones Lang LaSalle, Inc. (d) | 193,000 | 15,015,400 | |
Thrifts & Mortgage Finance - 2.0% | |||
Downey Financial Corp. (d) | 65,000 | 2,242,500 | |
Farmer Mac Class C (non-vtg.) | 115,000 | 3,164,800 | |
FirstFed Financial Corp. (a)(d) | 100,000 | 4,195,000 | |
Home Federal Bancorp, Inc. | 270,300 | 2,878,695 | |
Meridian Interstate Bancorp, Inc. (a)(d) | 191,100 | 1,834,560 | |
United Financial Bancorp, Inc. | 194,600 | 2,169,790 | |
Washington Federal, Inc. | 305,000 | 7,448,100 | |
Westfield Financial, Inc. | 125,000 | 1,280,000 | |
25,213,445 | |||
TOTAL FINANCIALS | 299,170,486 | ||
HEALTH CARE - 5.0% | |||
Biotechnology - 0.5% | |||
Theravance, Inc. (a) | 300,000 | 5,919,000 | |
Health Care Equipment & Supplies - 0.3% | |||
Zoll Medical Corp. (a) | 133,200 | 3,551,112 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - 2.7% | |||
Air Methods Corp. (a) | 209,167 | $ 9,596,582 | |
AMERIGROUP Corp. (a) | 245,000 | 9,192,400 | |
Owens & Minor, Inc. | 75,000 | 3,099,000 | |
Pediatrix Medical Group, Inc. (a) | 110,000 | 7,489,900 | |
ResCare, Inc. (a) | 75,000 | 1,677,750 | |
Universal American Financial Corp. (a) | 150,000 | 3,139,500 | |
34,195,132 | |||
Life Sciences Tools & Services - 1.3% | |||
Kendle International, Inc. (a) | 100,000 | 4,239,000 | |
PerkinElmer, Inc. | 100,000 | 2,489,000 | |
Pharmaceutical Product Development, Inc. | 220,000 | 9,539,200 | |
16,267,200 | |||
Pharmaceuticals - 0.2% | |||
Perrigo Co. | 100,000 | 3,084,000 | |
TOTAL HEALTH CARE | 63,016,444 | ||
INDUSTRIALS - 14.0% | |||
Aerospace & Defense - 2.1% | |||
AAR Corp. (a) | 182,300 | 5,370,558 | |
DRS Technologies, Inc. | 144,000 | 7,728,480 | |
Hexcel Corp. (a) | 250,200 | 5,461,866 | |
Orbital Sciences Corp. (a) | 325,000 | 7,572,500 | |
26,133,404 | |||
Air Freight & Logistics - 1.1% | |||
Hub Group, Inc. Class A (a) | 220,000 | 6,408,600 | |
Park-Ohio Holdings Corp. (a) | 356,646 | 7,974,605 | |
14,383,205 | |||
Airlines - 0.3% | |||
AirTran Holdings, Inc. (a)(d) | 440,000 | 3,797,200 | |
Commercial Services & Supplies - 2.3% | |||
FTI Consulting, Inc. (a)(d) | 360,000 | 19,911,600 | |
Interface, Inc. Class A | 148,590 | 2,371,496 | |
Navigant Consulting, Inc. (a) | 125,000 | 1,480,000 | |
Team, Inc. (a) | 176,256 | 5,296,493 | |
29,059,589 | |||
Common Stocks - continued | |||
Shares | Value | ||
INDUSTRIALS - continued | |||
Construction & Engineering - 3.1% | |||
Shaw Group, Inc. (a)(d) | 418,000 | $ 23,617,000 | |
URS Corp. (a) | 351,576 | 15,434,186 | |
39,051,186 | |||
Electrical Equipment - 1.2% | |||
Belden, Inc. | 345,000 | 14,593,500 | |
Machinery - 2.1% | |||
Accuride Corp. (a) | 921,000 | 5,774,670 | |
AGCO Corp. (a) | 65,000 | 3,914,300 | |
Astec Industries, Inc. (a) | 195,000 | 6,019,650 | |
Commercial Vehicle Group, Inc. (a) | 200,000 | 2,000,000 | |
Flow International Corp. (a) | 215,000 | 2,003,800 | |
Force Protection, Inc. (a)(d) | 910,000 | 3,721,900 | |
Manitowoc Co., Inc. | 89,940 | 3,428,513 | |
Titan Machinery, Inc. | 20,000 | 329,600 | |
27,192,433 | |||
Road & Rail - 0.9% | |||
J.B. Hunt Transport Services, Inc. (d) | 265,000 | 8,241,500 | |
YRC Worldwide, Inc. (a)(d) | 195,000 | 3,570,450 | |
11,811,950 | |||
Trading Companies & Distributors - 0.9% | |||
Kaman Corp. | 223,822 | 6,611,702 | |
Rush Enterprises, Inc.: | |||
Class A (a) | 247,500 | 4,153,050 | |
Class B (a) | 25,000 | 392,500 | |
11,157,252 | |||
TOTAL INDUSTRIALS | 177,179,719 | ||
INFORMATION TECHNOLOGY - 13.5% | |||
Communications Equipment - 2.1% | |||
Arris Group, Inc. (a)(d) | 1,735,000 | 15,250,650 | |
Polycom, Inc. (a) | 470,000 | 11,867,500 | |
27,118,150 | |||
Computers & Peripherals - 0.2% | |||
Data Domain, Inc. (d) | 60,000 | 1,352,400 | |
Quantum Corp. (a) | 725,000 | 1,667,500 | |
3,019,900 | |||
Electronic Equipment & Instruments - 3.9% | |||
Amphenol Corp. Class A | 40,000 | 1,597,600 | |
Common Stocks - continued | |||
Shares | Value | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - continued | |||
Ingram Micro, Inc. Class A (a) | 762,700 | $ 13,560,806 | |
Insight Enterprises, Inc. (a) | 710,600 | 12,272,062 | |
Itron, Inc. (a) | 60,000 | 4,944,000 | |
Mettler-Toledo International, Inc. (a) | 98,700 | 9,800,910 | |
Vishay Intertechnology, Inc. (a) | 677,491 | 7,106,881 | |
49,282,259 | |||
Internet Software & Services - 0.7% | |||
j2 Global Communications, Inc. (a) | 430,800 | 9,438,828 | |
IT Services - 2.3% | |||
CACI International, Inc. Class A (a) | 60,000 | 2,615,400 | |
ManTech International Corp. Class A (a) | 105,000 | 4,294,500 | |
Ness Technologies, Inc. (a) | 215,200 | 1,977,688 | |
Telvent GIT SA | 856,000 | 17,376,800 | |
VeriFone Holdings, Inc. (a)(d) | 140,000 | 2,739,800 | |
29,004,188 | |||
Semiconductors & Semiconductor Equipment - 1.9% | |||
Entegris, Inc. (a) | 500,000 | 3,850,000 | |
FormFactor, Inc. (a) | 55,000 | 1,332,100 | |
MKS Instruments, Inc. (a) | 208,900 | 3,885,540 | |
Pericom Semiconductor Corp. (a) | 80,000 | 1,084,800 | |
Skyworks Solutions, Inc. (a) | 300,000 | 2,415,000 | |
TriQuint Semiconductor, Inc. (a) | 600,000 | 2,844,000 | |
Zoran Corp. (a) | 755,000 | 8,909,000 | |
24,320,440 | |||
Software - 2.4% | |||
Blackbaud, Inc. | 265,000 | 7,332,550 | |
Quest Software, Inc. (a) | 790,000 | 11,810,500 | |
THQ, Inc. (a) | 590,000 | 10,625,900 | |
29,768,950 | |||
TOTAL INFORMATION TECHNOLOGY | 171,952,715 | ||
MATERIALS - 7.7% | |||
Chemicals - 2.3% | |||
Airgas, Inc. | 170,000 | 7,889,700 | |
CF Industries Holdings, Inc. | 140,000 | 14,970,200 | |
H.B. Fuller Co. | 205,000 | 4,255,800 | |
Tronox, Inc. Class A | 350,000 | 2,555,000 | |
29,670,700 | |||
Common Stocks - continued | |||
Shares | Value | ||
MATERIALS - continued | |||
Containers & Packaging - 0.2% | |||
Smurfit-Stone Container Corp. (a) | 240,000 | $ 2,277,600 | |
Metals & Mining - 5.2% | |||
Carpenter Technology Corp. | 480,000 | 29,587,200 | |
Compass Minerals International, Inc. (d) | 356,466 | 15,121,288 | |
Titanium Metals Corp. | 120,000 | 2,608,800 | |
Yamana Gold, Inc. | 1,107,474 | 18,374,214 | |
65,691,502 | |||
TOTAL MATERIALS | 97,639,802 | ||
TELECOMMUNICATION SERVICES - 0.7% | |||
Diversified Telecommunication Services - 0.7% | |||
Cincinnati Bell, Inc. (a) | 500,000 | 1,940,000 | |
Level 3 Communications, Inc. (a) | 800,000 | 2,752,000 | |
Time Warner Telecom, Inc. Class A (sub. vtg.) (a) | 230,000 | 4,020,400 | |
8,712,400 | |||
UTILITIES - 3.2% | |||
Electric Utilities - 1.2% | |||
ITC Holdings Corp. (d) | 189,000 | 9,986,760 | |
Westar Energy, Inc. | 200,000 | 4,872,000 | |
14,858,760 | |||
Independent Power Producers & Energy Traders - 0.9% | |||
Dynegy, Inc. Class A (a) | 705,000 | 4,949,100 | |
NRG Energy, Inc. (a) | 168,000 | 6,483,120 | |
11,432,220 | |||
Multi-Utilities - 1.1% | |||
CMS Energy Corp. | 892,500 | 13,985,475 | |
TOTAL UTILITIES | 40,276,455 | ||
TOTAL COMMON STOCKS (Cost $1,224,387,430) | 1,213,080,802 | ||
Money Market Funds - 11.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 3.79% (b) | 55,087,550 | $ 55,087,550 | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 95,440,430 | 95,440,430 | |
TOTAL MONEY MARKET FUNDS (Cost $150,527,980) | 150,527,980 | ||
TOTAL INVESTMENT PORTFOLIO - 107.6% (Cost $1,374,915,410) | 1,363,608,782 | ||
NET OTHER ASSETS - (7.6)% | (96,246,400) | ||
NET ASSETS - 100% | $ 1,267,362,382 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,069,997 |
Fidelity Securities Lending Cash Central Fund | 527,171 |
Total | $ 1,597,168 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2008 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $96,848,669) - See accompanying schedule: Unaffiliated issuers (cost $1,224,387,430) | $ 1,213,080,802 | |
Fidelity Central Funds (cost $150,527,980) | 150,527,980 | |
Total Investments (cost $1,374,915,410) | $ 1,363,608,782 | |
Receivable for investments sold | 7,985,390 | |
Receivable for fund shares sold | 3,012,143 | |
Dividends receivable | 302,418 | |
Distributions receivable from Fidelity Central Funds | 376,852 | |
Prepaid expenses | 3,991 | |
Receivable from investment adviser for expense reductions | 9,994 | |
Other receivables | 1,670 | |
Total assets | 1,375,301,240 | |
Liabilities | ||
Payable for investments purchased | $ 8,962,609 | |
Payable for fund shares redeemed | 2,169,504 | |
Accrued management fee | 919,002 | |
Distribution fees payable | 59,043 | |
Other affiliated payables | 321,337 | |
Other payables and accrued expenses | 66,933 | |
Collateral on securities loaned, at value | 95,440,430 | |
Total liabilities | 107,938,858 | |
Net Assets | $ 1,267,362,382 | |
Net Assets consist of: | ||
Paid in capital | $ 1,264,762,568 | |
Accumulated net investment loss | (779,787) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,686,229 | |
Net unrealized appreciation (depreciation) on investments | (11,306,628) | |
Net Assets | $ 1,267,362,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2008 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 12.64 | |
Maximum offering price per share (100/94.25 of $12.64) | $ 13.41 | |
Class T: | $ 12.57 | |
Maximum offering price per share (100/96.50 of $12.57) | $ 13.03 | |
Class B: | $ 12.45 | |
Class C: | $ 12.45 | |
Small Cap Value: | $ 12.71 | |
Institutional Class: | $ 12.71 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2008 (Unaudited) | ||
Investment Income | ||
Dividends | $ 5,828,806 | |
Interest | 2,368 | |
Income from Fidelity Central Funds (including $527,171 from security lending) | 1,597,168 | |
Total income | 7,428,342 | |
Expenses | ||
Management fee | $ 4,783,096 | |
Performance adjustment | 971,305 | |
Transfer agent fees | 1,733,442 | |
Distribution fees | 410,742 | |
Accounting and security lending fees | 223,101 | |
Custodian fees and expenses | 20,218 | |
Independent trustees' compensation | 2,839 | |
Registration fees | 70,480 | |
Audit | 30,595 | |
Legal | 3,797 | |
Miscellaneous | 40,960 | |
Total expenses before reductions | 8,290,575 | |
Expense reductions | (82,446) | 8,208,129 |
Net investment income (loss) | (779,787) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 30,130,520 | |
Foreign currency transactions | 91,090 | |
Total net realized gain (loss) | 30,221,610 | |
Change in net unrealized appreciation (depreciation) on investment securities | (145,320,911) | |
Net gain (loss) | (115,099,301) | |
Net increase (decrease) in net assets resulting from operations | $ (115,879,088) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended January 31, 2008 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (779,787) | $ (2,821,365) |
Net realized gain (loss) | 30,221,610 | 58,301,578 |
Change in net unrealized appreciation (depreciation) | (145,320,911) | 108,216,572 |
Net increase (decrease) in net assets resulting | (115,879,088) | 163,696,785 |
Distributions to shareholders from net realized gain | (53,457,458) | (55,419,267) |
Share transactions - net increase (decrease) | 32,092,403 | 206,517,786 |
Redemption fees | 98,489 | 174,668 |
Total increase (decrease) in net assets | (137,145,654) | 314,969,972 |
Net Assets | ||
Beginning of period | 1,404,508,036 | 1,089,538,064 |
End of period (including accumulated net investment loss of $779,787 and $0, respectively) | $ 1,267,362,382 | $ 1,404,508,036 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.34 | $ 13.17 | $ 12.80 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.02) | (.06) | (.03) | (.04) |
Net realized and unrealized gain (loss) | (1.15) | 1.90 | .74 | 2.84 |
Total from investment operations | (1.17) | 1.84 | .71 | 2.80 |
Distributions from net investment income | - | - | - | (.01) |
Distributions from net realized gain | (.53) | (.67) | (.35) | - |
Total distributions | (.53) | (.67) | (.35) | (.01) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.64 | $ 14.34 | $ 13.17 | $ 12.80 |
Total Return B, C, D | (8.41)% | 14.59% | 5.72% | 28.06% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 1.46% A | 1.45% | 1.51% | 1.46% A |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.44% A |
Expenses net of all reductions | 1.40% A | 1.40% | 1.36% | 1.38% A |
Net investment income (loss) | (.30)% A | (.44)% | (.24)% | (.46)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 56,041 | $ 61,357 | $ 39,931 | $ 9,390 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.28 | $ 13.13 | $ 12.78 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.04) | (.10) | (.07) | (.06) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.83 |
Total from investment operations | (1.18) | 1.80 | .67 | 2.77 |
Distributions from net realized gain | (.53) | (.65) | (.33) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.57 | $ 14.28 | $ 13.13 | $ 12.78 |
Total Return B, C, D | (8.54)% | 14.34% | 5.47% | 27.80% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 1.71% A | 1.66% | 1.67% | 1.72% A |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.68% A |
Expenses net of all reductions | 1.65% A | 1.65% | 1.61% | 1.62% A |
Net investment income (loss) | (.56)% A | (.69)% | (.49)% | (.70)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 37,485 | $ 51,518 | $ 45,460 | $ 12,725 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.19 | $ 13.07 | $ 12.73 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.07) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.82 |
Total from investment operations | (1.21) | 1.73 | .61 | 2.72 |
Distributions from net realized gain | (.53) | (.61) | (.28) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.45 | $ 14.19 | $ 13.07 | $ 12.73 |
Total Return B, C, D | (8.81)% | 13.78% | 4.97% | 27.30% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 2.21% A | 2.20% | 2.26% | 2.24% A |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% A |
Expenses net of all reductions | 2.15% A | 2.15% | 2.11% | 2.13% A |
Net investment income (loss) | (1.06)% A | (1.19)% | (.99)% | (1.21)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 9,681 | $ 12,075 | $ 10,214 | $ 3,931 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 H | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.19 | $ 13.07 | $ 12.74 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) E | (.07) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (1.14) | 1.90 | .74 | 2.83 |
Total from investment operations | (1.21) | 1.73 | .61 | 2.73 |
Distributions from net realized gain | (.53) | (.61) | (.29) | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 |
Net asset value, end of period | $ 12.45 | $ 14.19 | $ 13.07 | $ 12.74 |
Total Return B, C, D | (8.81)% | 13.77% | 4.92% | 27.40% |
Ratios to Average Net Assets F, I | ||||
Expenses before reductions | 2.21% A | 2.20% | 2.22% | 2.17% A |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.17% A |
Expenses net of all reductions | 2.15% A | 2.15% | 2.11% | 2.11% A |
Net investment income (loss) | (1.06)% A | (1.19)% | (.99)% | (1.19)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 26,598 | $ 34,155 | $ 26,791 | $ 11,732 |
Portfolio turnover rate G | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period November 3, 2004 (commencement of operations) to July 31, 2005.
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 other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Value
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | - I | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (1.16) | 1.91 | .74 | 2.84 |
Total from investment operations | (1.16) | 1.89 | .75 | 2.83 |
Distributions from net investment income | - | - | (.01) | (.01) |
Distributions from net realized gain | (.56) | (.68) | (.36) | - |
Total distributions | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in | - I | - I | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (8.34)% | 14.96% | 6.07% | 28.36% |
Ratios to Average Net Assets E, H | ||||
Expenses before reductions | 1.16% A | 1.11% | 1.09% | 1.05% A |
Expenses net of fee waivers, if any | 1.16% A | 1.11% | 1.09% | 1.05% A |
Expenses net of all reductions | 1.15% A | 1.11% | 1.06% | .99% A |
Net investment income (loss) | (.05)% A | (.15)% | .06% | (.08)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 1,126,876 | $ 1,233,808 | $ 957,720 | $ 582,689 |
Portfolio turnover rate F | 65% A | 67% | 93% | 60% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period November 3, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Six months ended January 31, 2008 | Years ended July 31, | |||
(Unaudited) | 2007 | 2006 | 2005 G | |
Selected Per-Share Data | ||||
Net asset value, beginning of period | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | ||||
Net investment income (loss) D | - I | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (1.16) | 1.91 | .74 | 2.84 |
Total from investment operations | (1.16) | 1.89 | .75 | 2.83 |
Distributions from net investment income | - | - | (.01) | (.01) |
Distributions from net realized gain | (.56) | (.68) | (.36) | - |
Total distributions | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | .01 | .01 |
Net asset value, end of period | $ 12.71 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (8.33)% | 14.99% | 6.08% | 28.36% |
Ratios to Average Net Assets E, H | ||||
Expenses before reductions | 1.15% A | 1.10% | 1.08% | 1.07% A |
Expenses net of fee waivers, if any | 1.15% A | 1.10% | 1.08% | 1.07% A |
Expenses net of all reductions | 1.15% A | 1.10% | 1.05% | 1.01% A |
Net investment income (loss) | (.05)% A | (.13)% | .08% | (.10)% A |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $ 10,681 | $ 11,594 | $ 9,422 | $ 3,761 |
Portfolio turnover rate F | 65% A | 67% | 93% | 60% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period November 3, 2004 (commencement of operations) to July 31, 2005.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Small Cap Value Fund (the Fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Small Cap Value and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
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 FMR.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 166,044,860 |
Unrealized depreciation | (178,526,118) |
Net unrealized appreciation (depreciation) | $ (12,481,258) |
Cost for federal income tax purposes | $ 1,376,090,040 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $428,542,771 and $477,603,433, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and a group fee rate that averaged ..26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. 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 the retail class of the Fund, Small Cap Value as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .85% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 77,135 | $ 9,140 |
Class T | .25% | .25% | 115,376 | - |
Class B | .75% | .25% | 56,978 | 42,734 |
Class C | .75% | .25% | 161,253 | 34,454 |
$ 410,742 | $ 86,328 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 28,666 |
Class T | 5,751 |
Class B* | 9,111 |
Class C* | 1,258 |
$ 44,786 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. Prior to January 1, 2008 Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the transfer agent for Small Cap Value.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
For the period, the total transfer agent fees paid by each class were as follows:
Amount | % of | |
Class A | $ 94,193 | .30 |
Class T | 70,252 | .30 |
Class B | 17,520 | .31 |
Class C | 49,267 | .30 |
Small Cap Value | 1,488,552 | .25 |
Institutional Class | 13,658 | .24 |
$ 1,733,442 |
* Annualized
Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $8,865 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,869 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation
Semiannual Report
8. Security Lending - continued
to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. 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 fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
9. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense | Reimbursement | |
Class A | 1.40% | $ 18,399 |
Class T | 1.65% | 12,738 |
Class B | 2.15% | 3,326 |
Class C | 2.15% | 8,943 |
$ 43,406 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,175 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses.
During the period, credits reduced each class' transfer agent expense as noted in the table below.
Transfer Agent | |
Class A | $ 347 |
Small Cap Value | 37,389 |
Institutional Class | 129 |
$ 37,865 |
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Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended | Year ended | |
From net realized gain | ||
Class A | $ 2,334,230 | $ 2,137,128 |
Class T | 1,800,458 | 2,317,701 |
Class B | 442,697 | 493,632 |
Class C | 1,258,476 | 1,276,323 |
Small Cap Value | 47,176,108 | 48,691,674 |
Institutional Class | 445,489 | 502,809 |
Total | $ 53,457,458 | $ 55,419,267 |
12. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |||
Six months ended January 31, | Year ended | Six months ended January 31, | Year ended | |
Class A | ||||
Shares sold | 1,037,790 | 2,083,427 | $ 14,370,246 | $ 29,477,855 |
Reinvestment of distributions | 158,451 | 153,067 | 2,181,136 | 1,967,811 |
Shares redeemed | (1,039,685) | (990,255) | (14,135,562) | (13,986,913) |
Net increase (decrease) | 156,556 | 1,246,239 | $ 2,415,820 | $ 17,458,753 |
Class T | ||||
Shares sold | 333,957 | 1,416,878 | $ 4,534,972 | $ 19,764,686 |
Reinvestment of distributions | 127,052 | 158,416 | 1,740,318 | 2,031,495 |
Shares redeemed | (1,086,149) | (1,429,554) | (14,795,703) | (20,059,646) |
Net increase (decrease) | (625,140) | 145,740 | $ (8,520,413) | $ 1,736,535 |
Semiannual Report
12. Share Transactions - continued
Shares | Dollars | |||
Six months ended January 31, | Year ended | Six months ended January 31, | Year ended | |
Class B | ||||
Shares sold | 66,563 | 297,938 | $ 904,855 | $ 4,153,087 |
Reinvestment of distributions | 29,083 | 34,686 | 395,378 | 444,445 |
Shares redeemed | (169,279) | (263,033) | (2,254,867) | (3,714,165) |
Net increase (decrease) | (73,633) | 69,591 | $ (954,634) | $ 883,367 |
Class C | ||||
Shares sold | 288,574 | 834,910 | $ 3,916,465 | $ 11,698,988 |
Reinvestment of distributions | 82,042 | 84,926 | 1,115,170 | 1,089,287 |
Shares redeemed | (641,818) | (562,438) | (8,548,816) | (7,834,552) |
Net increase (decrease) | (271,202) | 357,398 | $ (3,517,181) | $ 4,953,723 |
Small Cap Value | ||||
Shares sold | 18,361,917 | 42,235,359 | $ 252,244,988 | $ 595,504,607 |
Reinvestment of distributions | 3,344,768 | 3,617,365 | 46,241,128 | 46,609,140 |
Shares redeemed | (18,555,534) | (32,779,622) | (256,328,053) | (461,808,869) |
Net increase (decrease) | 3,151,151 | 13,073,102 | $ 42,158,063 | $ 180,304,878 |
Institutional Class | ||||
Shares sold | 224,981 | 309,983 | $ 3,126,200 | $ 4,413,286 |
Reinvestment of distributions | 21,655 | 23,286 | 299,380 | 300,279 |
Shares redeemed | (209,757) | (242,217) | (2,914,832) | (3,533,035) |
Net increase (decrease) | 36,879 | 91,052 | $ 510,748 | $ 1,180,530 |
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Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
ASCVI-USAN-0308
1.803748.104
(Fidelity Investment logo)(registered trademark)
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Securities Fund's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) for each Fund provide reasonable assurances that material information relating to such Fund 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 a Fund'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, a Fund's internal control over financial reporting.
Item 12. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Securities Fund
By: | /s/Kimberley Monasterio |
Kimberley Monasterio | |
President and Treasurer | |
Date: | March 28, 2008 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Kimberley Monasterio |
Kimberley Monasterio | |
President and Treasurer | |
Date: | March 28, 2008 |
By: | /s/Joseph B. Hollis |
Joseph B. Hollis | |
Chief Financial Officer | |
Date: | March 28, 2008 |