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)
Scott C. Goebel, 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, 2009 |
This report on Form N-CSR relates solely to the Registrant's Fidelity International Real Estate Fund, Fidelity Real Estate Income Fund and Fidelity Small Cap Value Fund series (each, a "Fund" and collectively, the "Funds").
Item 1. Reports to Stockholders
Fidelity®
International Real Estate
Fund
Semiannual Report
January 31, 2009
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | 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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
| Annualized
Expense Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008 to January 31, 2009 |
Class A | 1.44% | | | |
Actual | | $ 1,000.00 | $ 540.00 | $ 5.59 |
Hypothetical A | | $ 1,000.00 | $ 1,017.95 | $ 7.32 |
Class T | 1.70% | | | |
Actual | | $ 1,000.00 | $ 539.50 | $ 6.60 |
Hypothetical A | | $ 1,000.00 | $ 1,016.64 | $ 8.64 |
Class B | 2.18% | | | |
Actual | | $ 1,000.00 | $ 537.80 | $ 8.45 |
Hypothetical A | | $ 1,000.00 | $ 1,014.22 | $ 11.07 |
Class C | 2.18% | | | |
Actual | | $ 1,000.00 | $ 537.40 | $ 8.45 |
Hypothetical A | | $ 1,000.00 | $ 1,014.22 | $ 11.07 |
International Real Estate | 1.18% | | | |
Actual | | $ 1,000.00 | $ 540.30 | $ 4.58 |
Hypothetical A | | $ 1,000.00 | $ 1,019.26 | $ 6.01 |
Institutional Class | 1.18% | | | |
Actual | | $ 1,000.00 | $ 540.30 | $ 4.58 |
Hypothetical A | | $ 1,000.00 | $ 1,019.26 | $ 6.01 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Mitsubishi Estate Co. Ltd. | 8.1 | 7.2 |
Unibail-Rodamco | 7.7 | 6.7 |
Westfield Group unit | 7.0 | 7.8 |
Mitsui Fudosan Co. Ltd. | 6.6 | 5.5 |
Sun Hung Kai Properties Ltd. | 6.4 | 7.2 |
Nippon Building Fund, Inc. | 5.1 | 2.9 |
Hang Lung Properties Ltd. | 4.9 | 2.9 |
China Overseas Land & Investment Ltd. | 4.0 | 3.1 |
Land Securities Group PLC | 3.2 | 3.3 |
Japan Real Estate Investment Corp. | 2.6 | 0.0 |
| 55.6 | |
Top Five Countries as of January 31, 2009 |
(excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Japan | 29.1 | 18.5 |
Hong Kong | 23.0 | 22.2 |
Australia | 12.2 | 15.7 |
United Kingdom | 9.1 | 9.5 |
France | 7.7 | 9.5 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top REIT Sectors as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Management/Investment | 27.7 | 27.4 |
REITs - Office Buildings | 12.9 | 6.8 |
REITs - Shopping Centers | 7.0 | 5.3 |
REITs - Industrial Buildings | 2.9 | 4.9 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009 * | As of July 31, 2008 ** |
 | Stocks 95.7% | | | Stocks and
Investment
Companies 96.9% | |
 | Short-Term
Investments and
Net Other Assets 4.3% | | | Short-Term
Investments and
Net Other Assets 3.1% | |
* Foreign investments | 95.7% | | ** Foreign investments | 96.2% | |
Semiannual Report
Investments January 31, 2009 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.7% |
| Shares | | Value |
Australia - 12.2% |
CFS Retail Property Trust | 4,508,123 | | $ 5,084,958 |
Charter Hall Group unit | 3,006,676 | | 459,803 |
DEXUS Property Group unit | 4,193,485 | | 1,974,622 |
Goodman Group unit | 3,318,615 | | 1,453,492 |
Stockland Corp. Ltd. unit | 1,617,106 | | 3,674,048 |
Westfield Group unit | 2,301,771 | | 17,374,173 |
TOTAL AUSTRALIA | | 30,021,096 |
Bermuda - 0.2% |
HKC Holdings Ltd. | 9,736,363 | | 543,652 |
Cayman Islands - 0.7% |
New World China Land Ltd. (d) | 6,833,400 | | 1,703,126 |
China - 1.1% |
China Resources Land Ltd. | 2,402,000 | | 2,774,354 |
Finland - 1.0% |
Citycon Oyj | 1,188,403 | | 2,373,559 |
France - 7.7% |
Unibail-Rodamco | 140,217 | | 18,886,383 |
Germany - 0.1% |
DIC Asset AG | 41,460 | | 235,681 |
Greece - 0.6% |
Babis Vovos International Technical SA (a) | 235,830 | | 1,600,246 |
Hong Kong - 23.0% |
China Overseas Land & Investment Ltd. | 7,479,680 | | 9,781,988 |
Hang Lung Properties Ltd. | 5,374,000 | | 12,081,144 |
Hong Kong Land Holdings Ltd. | 2,643,000 | | 5,540,844 |
Link (REIT) | 3,258,915 | | 6,096,274 |
New World Development Co. Ltd. | 4,433,000 | | 4,202,115 |
Sino Land Co. | 3,064,174 | | 2,937,964 |
Sino-Ocean Land Holdings Ltd. | 700,000 | | 347,710 |
Sun Hung Kai Properties Ltd. | 1,782,000 | | 15,787,607 |
TOTAL HONG KONG | | 56,775,646 |
Italy - 1.0% |
Immobiliare Grande Distribuzione SpA | 1,817,700 | | 2,536,649 |
Japan - 29.1% |
Japan Real Estate Investment Corp. | 721 | | 6,498,638 |
Japan Retail Fund Investment Corp. | 609 | | 2,678,667 |
Kenedix Realty Investment Corp. (d) | 1,672 | | 4,357,687 |
Mitsubishi Estate Co. Ltd. | 1,515,000 | | 19,867,919 |
Mitsui Fudosan Co. Ltd. | 1,262,000 | | 16,276,374 |
Common Stocks - continued |
| Shares | | Value |
Japan - continued |
Nippon Accommodations Fund, Inc. | 119 | | $ 510,156 |
Nippon Building Fund, Inc. | 1,172 | | 12,574,360 |
Nomura Real Estate Office Fund, Inc. | 626 | | 3,938,541 |
NTT Urban Development Co. | 2,224 | | 1,911,153 |
ORIX JREIT, Inc. | 657 | | 3,099,042 |
TOTAL JAPAN | | 71,712,537 |
Netherlands - 2.9% |
Corio NV | 76,300 | | 3,274,465 |
Eurocommercial Properties NV (Certificaten Van Aandelen) unit | 133,432 | | 3,869,367 |
TOTAL NETHERLANDS | | 7,143,832 |
Norway - 0.3% |
Norwegian Property ASA | 966,000 | | 738,969 |
Philippines - 0.2% |
Filinvest Land, Inc. | 65,114,000 | | 588,443 |
Singapore - 5.9% |
Ascendas Real Estate Investment Trust (A-REIT) | 3,964,000 | | 3,745,004 |
CapitaCommercial Trust (REIT) | 2,849,000 | | 1,767,601 |
CapitaLand Ltd. | 3,303,900 | | 5,116,114 |
CapitaMall Trust | 3,788,000 | | 3,927,679 |
TOTAL SINGAPORE | | 14,556,398 |
Sweden - 0.6% |
Castellum AB | 215,000 | | 1,374,418 |
United Kingdom - 9.1% |
Big Yellow Group PLC (d) | 556,900 | | 1,370,409 |
British Land Co. PLC (d) | 904,600 | | 5,933,874 |
Hammerson PLC (d) | 348,500 | | 2,049,861 |
Land Securities Group PLC | 798,600 | | 7,982,276 |
Liberty International PLC (d) | 538,000 | | 2,907,121 |
Segro PLC (d) | 704,900 | | 1,632,419 |
Unite Group PLC | 651,900 | | 604,817 |
TOTAL UNITED KINGDOM | | 22,480,777 |
TOTAL COMMON STOCKS (Cost $440,956,424) | 236,045,766 |
Money Market Funds - 6.7% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.78% (b) | 7,096,247 | | $ 7,096,247 |
Fidelity Securities Lending Cash Central Fund, 0.71% (b)(c) | 9,317,485 | | 9,317,485 |
TOTAL MONEY MARKET FUNDS (Cost $16,413,732) | 16,413,732 |
TOTAL INVESTMENT PORTFOLIO - 102.4% (Cost $457,370,156) | | 252,459,498 |
NET OTHER ASSETS - (2.4)% | | (5,946,608) |
NET ASSETS - 100% | $ 246,512,890 |
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 | $ 108,499 |
Fidelity Securities Lending Cash Central Fund | 215,845 |
Total | $ 324,344 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 252,459,498 | $ 74,372,689 | $ 178,086,809 | $ - |
Income Tax Information |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $91,247,042 of losses recognized during the period November 1, 2007 to July 31, 2008. |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $51,983,093 of passive foreign investment company losses recognized during the period November 1, 2007 to July 31, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $8,973,608) - See accompanying schedule: Unaffiliated issuers (cost $440,956,424) | $ 236,045,766 | |
Fidelity Central Funds (cost $16,413,732) | 16,413,732 | |
Total Investments (cost $457,370,156) | | $ 252,459,498 |
Foreign currency held at value (cost $59,402) | | 58,969 |
Receivable for investments sold | | 3,723,429 |
Receivable for fund shares sold | | 260,380 |
Dividends receivable | | 1,435,430 |
Distributions receivable from Fidelity Central Funds | | 58,781 |
Prepaid expenses | | 3,894 |
Other receivables | | 527,523 |
Total assets | | 258,527,904 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,983,661 | |
Payable for fund shares redeemed | 363,621 | |
Accrued management fee | 159,575 | |
Distribution fees payable | 3,941 | |
Other affiliated payables | 81,641 | |
Other payables and accrued expenses | 105,090 | |
Collateral on securities loaned, at value | 9,317,485 | |
Total liabilities | | 12,015,014 |
| | |
Net Assets | | $ 246,512,890 |
Net Assets consist of: | | |
Paid in capital | | $ 739,253,141 |
Distributions in excess of net investment income | | (46,673,109) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (241,091,068) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (204,976,074) |
Net Assets | | $ 246,512,890 |
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, 2009 (Unaudited) |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($4,912,371 ÷ 855,862 shares) | | $ 5.74 |
| | |
Maximum offering price per share (100/94.25 of $5.74) | | $ 6.09 |
Class T:
Net Asset Value and redemption price per share ($1,603,748 ÷ 280,109 shares) | | $ 5.73 |
| | |
Maximum offering price per share (100/96.50 of $5.73) | | $ 5.94 |
Class B:
Net Asset Value and offering price per share ($448,449 ÷ 78,786 shares)A | | $ 5.69 |
| | |
Class C:
Net Asset Value and offering price per share ($1,869,811 ÷ 328,923 shares) A | | $ 5.68 |
| | |
International Real Estate:
Net Asset Value, offering price and redemption price per share ($236,296,223 ÷ 40,941,359 shares) | | $ 5.77 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,382,288 ÷ 239,967 shares) | | $ 5.76 |
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, 2009 (Unaudited) |
Investment Income | | |
Dividends | | $ 7,870,994 |
Interest | | 7,721 |
Income from Fidelity Central Funds | | 324,344 |
| | 8,203,059 |
Less foreign taxes withheld | | (680,031) |
Total income | | 7,523,028 |
| | |
Expenses | | |
Management fee | $ 1,349,759 | |
Transfer agent fees | 556,390 | |
Distribution fees | 33,654 | |
Accounting and security lending fees | 99,173 | |
Custodian fees and expenses | 122,572 | |
Independent trustees' compensation | 1,172 | |
Registration fees | 43,709 | |
Audit | 41,065 | |
Legal | 2,793 | |
Miscellaneous | 17,029 | |
Total expenses before reductions | 2,267,316 | |
Expense reductions | (54,272) | 2,213,044 |
Net investment income (loss) | | 5,309,984 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (138,009,092) | |
Foreign currency transactions | (281,757) | |
Total net realized gain (loss) | | (138,290,849) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (121,166,868) | |
Assets and liabilities in foreign currencies | (33,033) | |
Total change in net unrealized appreciation (depreciation) | | (121,199,901) |
Net gain (loss) | | (259,490,750) |
Net increase (decrease) in net assets resulting from operations | | $ (254,180,766) |
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, 2009 (Unaudited) | Year endedJuly 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 5,309,984 | $ 14,898,195 |
Net realized gain (loss) | (138,290,849) | (74,876,486) |
Change in net unrealized appreciation (depreciation) | (121,199,901) | (134,244,778) |
Net increase (decrease) in net assets resulting from operations | (254,180,766) | (194,223,069) |
Distributions to shareholders from net investment income | - | (18,764,211) |
Distributions to shareholders from net realized gain | - | (91,321,071) |
Total distributions | - | (110,085,282) |
Share transactions - net increase (decrease) | (97,617,143) | (143,878,212) |
Redemption fees | 87,761 | 522,585 |
Total increase (decrease) in net assets | (351,710,148) | (447,663,978) |
| | |
Net Assets | | |
Beginning of period | 598,223,038 | 1,045,887,016 |
End of period (including distributions in excess of net investment income of $46,673,109 and distributions in excess of net investment income of $51,983,093, respectively) | $ 246,512,890 | $ 598,223,038 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.63 | $ 15.71 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .10 | .20 | .11 |
Net realized and unrealized gain (loss) | (4.99) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.28) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.74 | $ 10.63 | $ 15.71 |
Total Return B, C, D | (46.00)% | (23.20)% | (10.02)% |
Ratios to Average Net Assets F,I | | | |
Expenses before reductions | 1.44% A | 1.38% | 1.37% A |
Expenses net of fee waivers, if any | 1.44% A | 1.38% | 1.37% A |
Expenses net of all reductions | 1.41% A | 1.35% | 1.26% A |
Net investment income (loss) | 2.56% A | 1.58% | 2.08% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 4,912 | $ 9,976 | $ 5,087 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.62 | $ 15.70 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .09 | .17 | .10 |
Net realized and unrealized gain (loss) | (4.98) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.31) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.73 | $ 10.62 | $ 15.70 |
Total ReturnB, C, D | (46.05)% | (23.39)% | (10.08)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 1.70% A | 1.64% | 1.61% A |
Expenses net of fee waivers, if any | 1.70% A | 1.64% | 1.61% A |
Expenses net of all reductions | 1.67% A | 1.60% | 1.51% A |
Net investment income (loss) | 2.30% A | 1.32% | 1.90% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,604 | $ 7,566 | $ 2,398 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.58 | $ 15.67 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | (4.96) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.37) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.69 | $ 10.58 | $ 15.67 |
Total Return B, C, D | (46.22)% | (23.80)% | (10.25)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 2.18% A | 2.14% | 2.11% A |
Expenses net of fee waivers, if any | 2.18% A | 2.14% | 2.11% A |
Expenses net of all reductions | 2.15% A | 2.11% | 2.01% A |
Net investment income (loss) | 1.81% A | .82% | 1.38% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 448 | $ 930 | $ 1,158 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.57 | $ 15.67 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | (4.96) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.37) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.68 | $ 10.57 | $ 15.67 |
Total Return B, C, D | (46.26)% | (23.78)% | (10.25)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 2.18% A | 2.14% | 2.10% A |
Expenses net of fee waivers, if any | 2.18% A | 2.14% | 2.10% A |
Expenses net of all reductions | 2.15% A | 2.11% | 2.00% A |
Net investment income (loss) | 1.81% A | .82% | 1.35% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,870 | $ 3,477 | $ 2,629 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - International Real Estate
| Six months ended January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | | |
Net asset value, beginning of period | $ 10.68 | $ 15.73 | $ 14.69 | $ 12.09 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .11 | .25 | .31 | .30 | .23 |
Net realized and unrealized gain (loss) | (5.02) | (3.50) | 2.35 | 2.93 | 1.91 |
Total from investment operations | (4.91) | (3.25) | 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 | - I | .01 | .02 | .01 | .01 |
Net asset value, end of period | $ 5.77 | $ 10.68 | $ 15.73 | $ 14.69 | $ 12.09 |
Total Return B, C | (45.97)% | (22.97)% | 19.01% | 27.85% | 21.53% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.18% A | 1.11% | 1.07% | 1.12% | 1.29% A |
Expenses net of fee waivers, if any | 1.18% A | 1.10% | 1.06% | 1.12% | 1.29% A |
Expenses net of all reductions | 1.15% A | 1.07% | .96% | .91% | 1.27% A |
Net investment income (loss) | 2.82% A | 1.86% | 1.86% | 2.23% | 2.21% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 236,296 | $ 572,985 | $ 1,032,138 | $ 447,854 | $ 160,980 |
Portfolio turnover rate F | 39% A | 63% | 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. 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 G |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.66 | $ 15.73 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) D | .11 | .24 | .12 |
Net realized and unrealized gain (loss) | (5.01) | (3.49) | (1.86) |
Total from investment operations | (4.90) | (3.25) | (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 | - I | .01 | .01 |
Net asset value, end of period | $ 5.76 | $ 10.66 | $ 15.73 |
Total Return B, C | (45.97)% | (22.98)% | (9.91)% |
Ratios to Average Net Assets E, H | | | |
Expenses before reductions | 1.18% A | 1.13% | 1.08% A |
Expenses net of fee waivers, if any | 1.18% A | 1.13% | 1.08% A |
Expenses net of all reductions | 1.15% A | 1.10% | .97% A |
Net investment income (loss) | 2.82% A | 1.83% | 2.27% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,382 | $ 3,289 | $ 2,477 |
Portfolio turnover rate F | 39% A | 63% | 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 For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
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, 2009 (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 investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund 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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments, is included at the end of the Fund's Schedule of Investments.
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,010,085 |
Unrealized depreciation | (217,263,269) |
Net unrealized appreciation (depreciation) | $ (215,253,184) |
Cost for federal income tax purposes | $ 467,712,682 |
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.
Semiannual Report
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $73,651,271 and $158,345,538, 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:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 8,692 | $ 763 |
Class T | .25% | .25% | 9,472 | - |
Class B | .75% | .25% | 3,249 | 2,436 |
Class C | .75% | .25% | 12,241 | 4,958 |
| | | $ 33,654 | $ 8,157 |
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
by FDC |
Class A | $ 1,648 |
Class T | 380 |
Class B* | 520 |
Class C* | 471 |
| $ 3,019 |
* 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 respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
| Amount | % of
Average
Net Assets* |
Class A | $ 10,568 | .30 |
Class T | 5,926 | .31 |
Class B | 965 | .30 |
Class C | 3,629 | .30 |
International Real Estate | 532,374 | .29 |
Institutional Class | 2,928 | .29 |
| $ 556,390 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $510 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Security Lending - continued
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 $215,845.
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 $53,618 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
expense reduction |
International Real Estate | $ 649 |
Institutional Class | 5 |
| $ 654 |
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.
During the period, Lehman Brothers Holdings, Inc. and certain of its affiliates (LBHI) sought protection under the insolvency laws of their jurisdictions of organization, including the United States, the United Kingdom and Japan. At the time LBHI's insolvency proceedings were instituted, the Fund had outstanding securities trades with counterparties affiliated with LBHI. As a result of the insolvency proceedings, LBHI is unable to fulfill its commitments and, in certain cases, the Fund may have terminated its trades and related agreements with the relevant entities and, where appropriate, is in the process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to the terminated trades and agreements is immaterial.
Semiannual Report
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
From net investment income | | |
Class A | $ - | $ 129,243 |
Class T | - | 47,714 |
Class B | - | 18,349 |
Class C | - | 47,789 |
International Real Estate | - | 18,458,440 |
Institutional Class | - | 62,676 |
Total | $ - | $ 18,764,211 |
From net realized gain | | |
Class A | $ - | $ 682,544 |
Class T | - | 265,212 |
Class B | - | 121,612 |
Class C | - | 311,919 |
International Real Estate | - | 89,636,941 |
Institutional Class | - | 302,843 |
Total | $ - | $ 91,321,071 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31, 2009 | Year ended
July 31,
2008 | Six months ended January 31, 2009 | Year ended
July 31,
2008 |
Class A | | | | |
Shares sold | 159,024 | 900,194 | $ 1,283,720 | $ 11,742,685 |
Reinvestment of distributions | - | 55,923 | - | 765,385 |
Shares redeemed | (241,305) | (341,825) | (1,771,474) | (4,339,419) |
Net increase (decrease) | (82,281) | 614,292 | $ (487,754) | $ 8,168,651 |
Class T | | | | |
Shares sold | 81,988 | 633,863 | $ 681,845 | $ 7,676,814 |
Reinvestment of distributions | - | 21,513 | - | 296,970 |
Shares redeemed | (514,333) | (95,643) | (3,714,096) | (1,262,734) |
Net increase (decrease) | (432,345) | 559,733 | $ (3,032,251) | $ 6,711,050 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
| Shares | Dollars |
| Six months ended January 31, 2009 | Year ended
July 31,
2008 | Six months ended January 31, 2009 | Year ended
July 31,
2008 |
Class B | | | | |
Shares sold | 16,319 | 50,624 | $ 137,159 | $ 676,962 |
Reinvestment of distributions | - | 9,315 | - | 128,955 |
Shares redeemed | (25,396) | (45,973) | (183,423) | (599,735) |
Net increase (decrease) | (9,077) | 13,966 | $ (46,264) | $ 206,182 |
Class C | | | | |
Shares sold | 74,074 | 207,359 | $ 573,515 | $ 2,751,080 |
Reinvestment of distributions | - | 24,058 | - | 331,352 |
Shares redeemed | (74,064) | (70,253) | (570,005) | (919,320) |
Net increase (decrease) | 10 | 161,164 | $ 3,510 | $ 2,163,112 |
International Real Estate | | | | |
Shares sold | 5,041,222 | 21,686,399 | $ 39,892,022 | $ 295,025,902 |
Reinvestment of distributions | - | 7,157,452 | - | 99,352,759 |
Shares redeemed | (17,756,372) | (40,815,706) | (133,386,638) | (557,680,698) |
Net increase (decrease) | (12,715,150) | (11,971,855) | $ (93,494,616) | $ (163,302,037) |
Institutional Class | | | | |
Shares sold | 59,513 | 282,296 | $ 467,329 | $ 3,825,173 |
Reinvestment of distributions | - | 22,489 | - | 308,363 |
Shares redeemed | (128,175) | (153,644) | (1,027,097) | (1,958,706) |
Net increase (decrease) | (68,662) | 151,141 | $ (559,768) | $ 2,174,830 |
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
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
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-Advisers
FMR Co., Inc.
Fidelity Research & Analysis Company
Fidelity Management & Research
(U.K.) Inc.
Fidelity Investments Japan Limited
FIL Investment Advisers
FIL Investment Advisers (U.K.) Ltd.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
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
The Bank of New York Mellon
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®)
1-800-544-5555
Automated line for quickest service
IRE-USAN-0309
1.801329.105
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
International Real Estate
Fund - Class A, Class T,
Class B, and Class C
Semiannual Report
January 31, 2009
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 | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | 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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
| Annualized
Expense Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008 to January 31, 2009 |
Class A | 1.44% | | | |
Actual | | $ 1,000.00 | $ 540.00 | $ 5.59 |
Hypothetical A | | $ 1,000.00 | $ 1,017.95 | $ 7.32 |
Class T | 1.70% | | | |
Actual | | $ 1,000.00 | $ 539.50 | $ 6.60 |
Hypothetical A | | $ 1,000.00 | $ 1,016.64 | $ 8.64 |
Class B | 2.18% | | | |
Actual | | $ 1,000.00 | $ 537.80 | $ 8.45 |
Hypothetical A | | $ 1,000.00 | $ 1,014.22 | $ 11.07 |
Class C | 2.18% | | | |
Actual | | $ 1,000.00 | $ 537.40 | $ 8.45 |
Hypothetical A | | $ 1,000.00 | $ 1,014.22 | $ 11.07 |
International Real Estate | 1.18% | | | |
Actual | | $ 1,000.00 | $ 540.30 | $ 4.58 |
Hypothetical A | | $ 1,000.00 | $ 1,019.26 | $ 6.01 |
Institutional Class | 1.18% | | | |
Actual | | $ 1,000.00 | $ 540.30 | $ 4.58 |
Hypothetical A | | $ 1,000.00 | $ 1,019.26 | $ 6.01 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Mitsubishi Estate Co. Ltd. | 8.1 | 7.2 |
Unibail-Rodamco | 7.7 | 6.7 |
Westfield Group unit | 7.0 | 7.8 |
Mitsui Fudosan Co. Ltd. | 6.6 | 5.5 |
Sun Hung Kai Properties Ltd. | 6.4 | 7.2 |
Nippon Building Fund, Inc. | 5.1 | 2.9 |
Hang Lung Properties Ltd. | 4.9 | 2.9 |
China Overseas Land & Investment Ltd. | 4.0 | 3.1 |
Land Securities Group PLC | 3.2 | 3.3 |
Japan Real Estate Investment Corp. | 2.6 | 0.0 |
| 55.6 | |
Top Five Countries as of January 31, 2009 |
(excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Japan | 29.1 | 18.5 |
Hong Kong | 23.0 | 22.2 |
Australia | 12.2 | 15.7 |
United Kingdom | 9.1 | 9.5 |
France | 7.7 | 9.5 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top REIT Sectors as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Management/Investment | 27.7 | 27.4 |
REITs - Office Buildings | 12.9 | 6.8 |
REITs - Shopping Centers | 7.0 | 5.3 |
REITs - Industrial Buildings | 2.9 | 4.9 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009 * | As of July 31, 2008 ** |
| Stocks 95.7% | | | Stocks and
Investment
Companies 96.9% | |
| Short-Term
Investments and
Net Other Assets 4.3% | | | Short-Term
Investments and
Net Other Assets 3.1% | |
* Foreign investments | 95.7% | | ** Foreign investments | 96.2% | |
Semiannual Report
Investments January 31, 2009 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.7% |
| Shares | | Value |
Australia - 12.2% |
CFS Retail Property Trust | 4,508,123 | | $ 5,084,958 |
Charter Hall Group unit | 3,006,676 | | 459,803 |
DEXUS Property Group unit | 4,193,485 | | 1,974,622 |
Goodman Group unit | 3,318,615 | | 1,453,492 |
Stockland Corp. Ltd. unit | 1,617,106 | | 3,674,048 |
Westfield Group unit | 2,301,771 | | 17,374,173 |
TOTAL AUSTRALIA | | 30,021,096 |
Bermuda - 0.2% |
HKC Holdings Ltd. | 9,736,363 | | 543,652 |
Cayman Islands - 0.7% |
New World China Land Ltd. (d) | 6,833,400 | | 1,703,126 |
China - 1.1% |
China Resources Land Ltd. | 2,402,000 | | 2,774,354 |
Finland - 1.0% |
Citycon Oyj | 1,188,403 | | 2,373,559 |
France - 7.7% |
Unibail-Rodamco | 140,217 | | 18,886,383 |
Germany - 0.1% |
DIC Asset AG | 41,460 | | 235,681 |
Greece - 0.6% |
Babis Vovos International Technical SA (a) | 235,830 | | 1,600,246 |
Hong Kong - 23.0% |
China Overseas Land & Investment Ltd. | 7,479,680 | | 9,781,988 |
Hang Lung Properties Ltd. | 5,374,000 | | 12,081,144 |
Hong Kong Land Holdings Ltd. | 2,643,000 | | 5,540,844 |
Link (REIT) | 3,258,915 | | 6,096,274 |
New World Development Co. Ltd. | 4,433,000 | | 4,202,115 |
Sino Land Co. | 3,064,174 | | 2,937,964 |
Sino-Ocean Land Holdings Ltd. | 700,000 | | 347,710 |
Sun Hung Kai Properties Ltd. | 1,782,000 | | 15,787,607 |
TOTAL HONG KONG | | 56,775,646 |
Italy - 1.0% |
Immobiliare Grande Distribuzione SpA | 1,817,700 | | 2,536,649 |
Japan - 29.1% |
Japan Real Estate Investment Corp. | 721 | | 6,498,638 |
Japan Retail Fund Investment Corp. | 609 | | 2,678,667 |
Kenedix Realty Investment Corp. (d) | 1,672 | | 4,357,687 |
Mitsubishi Estate Co. Ltd. | 1,515,000 | | 19,867,919 |
Mitsui Fudosan Co. Ltd. | 1,262,000 | | 16,276,374 |
Common Stocks - continued |
| Shares | | Value |
Japan - continued |
Nippon Accommodations Fund, Inc. | 119 | | $ 510,156 |
Nippon Building Fund, Inc. | 1,172 | | 12,574,360 |
Nomura Real Estate Office Fund, Inc. | 626 | | 3,938,541 |
NTT Urban Development Co. | 2,224 | | 1,911,153 |
ORIX JREIT, Inc. | 657 | | 3,099,042 |
TOTAL JAPAN | | 71,712,537 |
Netherlands - 2.9% |
Corio NV | 76,300 | | 3,274,465 |
Eurocommercial Properties NV (Certificaten Van Aandelen) unit | 133,432 | | 3,869,367 |
TOTAL NETHERLANDS | | 7,143,832 |
Norway - 0.3% |
Norwegian Property ASA | 966,000 | | 738,969 |
Philippines - 0.2% |
Filinvest Land, Inc. | 65,114,000 | | 588,443 |
Singapore - 5.9% |
Ascendas Real Estate Investment Trust (A-REIT) | 3,964,000 | | 3,745,004 |
CapitaCommercial Trust (REIT) | 2,849,000 | | 1,767,601 |
CapitaLand Ltd. | 3,303,900 | | 5,116,114 |
CapitaMall Trust | 3,788,000 | | 3,927,679 |
TOTAL SINGAPORE | | 14,556,398 |
Sweden - 0.6% |
Castellum AB | 215,000 | | 1,374,418 |
United Kingdom - 9.1% |
Big Yellow Group PLC (d) | 556,900 | | 1,370,409 |
British Land Co. PLC (d) | 904,600 | | 5,933,874 |
Hammerson PLC (d) | 348,500 | | 2,049,861 |
Land Securities Group PLC | 798,600 | | 7,982,276 |
Liberty International PLC (d) | 538,000 | | 2,907,121 |
Segro PLC (d) | 704,900 | | 1,632,419 |
Unite Group PLC | 651,900 | | 604,817 |
TOTAL UNITED KINGDOM | | 22,480,777 |
TOTAL COMMON STOCKS (Cost $440,956,424) | 236,045,766 |
Money Market Funds - 6.7% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.78% (b) | 7,096,247 | | $ 7,096,247 |
Fidelity Securities Lending Cash Central Fund, 0.71% (b)(c) | 9,317,485 | | 9,317,485 |
TOTAL MONEY MARKET FUNDS (Cost $16,413,732) | 16,413,732 |
TOTAL INVESTMENT PORTFOLIO - 102.4% (Cost $457,370,156) | | 252,459,498 |
NET OTHER ASSETS - (2.4)% | | (5,946,608) |
NET ASSETS - 100% | $ 246,512,890 |
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 | $ 108,499 |
Fidelity Securities Lending Cash Central Fund | 215,845 |
Total | $ 324,344 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 252,459,498 | $ 74,372,689 | $ 178,086,809 | $ - |
Income Tax Information |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $91,247,042 of losses recognized during the period November 1, 2007 to July 31, 2008. |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $51,983,093 of passive foreign investment company losses recognized during the period November 1, 2007 to July 31, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $8,973,608) - See accompanying schedule: Unaffiliated issuers (cost $440,956,424) | $ 236,045,766 | |
Fidelity Central Funds (cost $16,413,732) | 16,413,732 | |
Total Investments (cost $457,370,156) | | $ 252,459,498 |
Foreign currency held at value (cost $59,402) | | 58,969 |
Receivable for investments sold | | 3,723,429 |
Receivable for fund shares sold | | 260,380 |
Dividends receivable | | 1,435,430 |
Distributions receivable from Fidelity Central Funds | | 58,781 |
Prepaid expenses | | 3,894 |
Other receivables | | 527,523 |
Total assets | | 258,527,904 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,983,661 | |
Payable for fund shares redeemed | 363,621 | |
Accrued management fee | 159,575 | |
Distribution fees payable | 3,941 | |
Other affiliated payables | 81,641 | |
Other payables and accrued expenses | 105,090 | |
Collateral on securities loaned, at value | 9,317,485 | |
Total liabilities | | 12,015,014 |
| | |
Net Assets | | $ 246,512,890 |
Net Assets consist of: | | |
Paid in capital | | $ 739,253,141 |
Distributions in excess of net investment income | | (46,673,109) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (241,091,068) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (204,976,074) |
Net Assets | | $ 246,512,890 |
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, 2009 (Unaudited) |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($4,912,371 ÷ 855,862 shares) | | $ 5.74 |
| | |
Maximum offering price per share (100/94.25 of $5.74) | | $ 6.09 |
Class T:
Net Asset Value and redemption price per share ($1,603,748 ÷ 280,109 shares) | | $ 5.73 |
| | |
Maximum offering price per share (100/96.50 of $5.73) | | $ 5.94 |
Class B:
Net Asset Value and offering price per share ($448,449 ÷ 78,786 shares)A | | $ 5.69 |
| | |
Class C:
Net Asset Value and offering price per share ($1,869,811 ÷ 328,923 shares) A | | $ 5.68 |
| | |
International Real Estate:
Net Asset Value, offering price and redemption price per share ($236,296,223 ÷ 40,941,359 shares) | | $ 5.77 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,382,288 ÷ 239,967 shares) | | $ 5.76 |
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, 2009 (Unaudited) |
Investment Income | | |
Dividends | | $ 7,870,994 |
Interest | | 7,721 |
Income from Fidelity Central Funds | | 324,344 |
| | 8,203,059 |
Less foreign taxes withheld | | (680,031) |
Total income | | 7,523,028 |
| | |
Expenses | | |
Management fee | $ 1,349,759 | |
Transfer agent fees | 556,390 | |
Distribution fees | 33,654 | |
Accounting and security lending fees | 99,173 | |
Custodian fees and expenses | 122,572 | |
Independent trustees' compensation | 1,172 | |
Registration fees | 43,709 | |
Audit | 41,065 | |
Legal | 2,793 | |
Miscellaneous | 17,029 | |
Total expenses before reductions | 2,267,316 | |
Expense reductions | (54,272) | 2,213,044 |
Net investment income (loss) | | 5,309,984 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (138,009,092) | |
Foreign currency transactions | (281,757) | |
Total net realized gain (loss) | | (138,290,849) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (121,166,868) | |
Assets and liabilities in foreign currencies | (33,033) | |
Total change in net unrealized appreciation (depreciation) | | (121,199,901) |
Net gain (loss) | | (259,490,750) |
Net increase (decrease) in net assets resulting from operations | | $ (254,180,766) |
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, 2009 (Unaudited) | Year endedJuly 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 5,309,984 | $ 14,898,195 |
Net realized gain (loss) | (138,290,849) | (74,876,486) |
Change in net unrealized appreciation (depreciation) | (121,199,901) | (134,244,778) |
Net increase (decrease) in net assets resulting from operations | (254,180,766) | (194,223,069) |
Distributions to shareholders from net investment income | - | (18,764,211) |
Distributions to shareholders from net realized gain | - | (91,321,071) |
Total distributions | - | (110,085,282) |
Share transactions - net increase (decrease) | (97,617,143) | (143,878,212) |
Redemption fees | 87,761 | 522,585 |
Total increase (decrease) in net assets | (351,710,148) | (447,663,978) |
| | |
Net Assets | | |
Beginning of period | 598,223,038 | 1,045,887,016 |
End of period (including distributions in excess of net investment income of $46,673,109 and distributions in excess of net investment income of $51,983,093, respectively) | $ 246,512,890 | $ 598,223,038 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.63 | $ 15.71 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .10 | .20 | .11 |
Net realized and unrealized gain (loss) | (4.99) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.28) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.74 | $ 10.63 | $ 15.71 |
Total Return B, C, D | (46.00)% | (23.20)% | (10.02)% |
Ratios to Average Net Assets F,I | | | |
Expenses before reductions | 1.44% A | 1.38% | 1.37% A |
Expenses net of fee waivers, if any | 1.44% A | 1.38% | 1.37% A |
Expenses net of all reductions | 1.41% A | 1.35% | 1.26% A |
Net investment income (loss) | 2.56% A | 1.58% | 2.08% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 4,912 | $ 9,976 | $ 5,087 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.62 | $ 15.70 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .09 | .17 | .10 |
Net realized and unrealized gain (loss) | (4.98) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.31) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.73 | $ 10.62 | $ 15.70 |
Total ReturnB, C, D | (46.05)% | (23.39)% | (10.08)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 1.70% A | 1.64% | 1.61% A |
Expenses net of fee waivers, if any | 1.70% A | 1.64% | 1.61% A |
Expenses net of all reductions | 1.67% A | 1.60% | 1.51% A |
Net investment income (loss) | 2.30% A | 1.32% | 1.90% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,604 | $ 7,566 | $ 2,398 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.58 | $ 15.67 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | (4.96) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.37) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.69 | $ 10.58 | $ 15.67 |
Total Return B, C, D | (46.22)% | (23.80)% | (10.25)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 2.18% A | 2.14% | 2.11% A |
Expenses net of fee waivers, if any | 2.18% A | 2.14% | 2.11% A |
Expenses net of all reductions | 2.15% A | 2.11% | 2.01% A |
Net investment income (loss) | 1.81% A | .82% | 1.38% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 448 | $ 930 | $ 1,158 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.57 | $ 15.67 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | (4.96) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.37) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.68 | $ 10.57 | $ 15.67 |
Total Return B, C, D | (46.26)% | (23.78)% | (10.25)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 2.18% A | 2.14% | 2.10% A |
Expenses net of fee waivers, if any | 2.18% A | 2.14% | 2.10% A |
Expenses net of all reductions | 2.15% A | 2.11% | 2.00% A |
Net investment income (loss) | 1.81% A | .82% | 1.35% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,870 | $ 3,477 | $ 2,629 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - International Real Estate
| Six months ended January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | | |
Net asset value, beginning of period | $ 10.68 | $ 15.73 | $ 14.69 | $ 12.09 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .11 | .25 | .31 | .30 | .23 |
Net realized and unrealized gain (loss) | (5.02) | (3.50) | 2.35 | 2.93 | 1.91 |
Total from investment operations | (4.91) | (3.25) | 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 | - I | .01 | .02 | .01 | .01 |
Net asset value, end of period | $ 5.77 | $ 10.68 | $ 15.73 | $ 14.69 | $ 12.09 |
Total Return B, C | (45.97)% | (22.97)% | 19.01% | 27.85% | 21.53% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.18% A | 1.11% | 1.07% | 1.12% | 1.29% A |
Expenses net of fee waivers, if any | 1.18% A | 1.10% | 1.06% | 1.12% | 1.29% A |
Expenses net of all reductions | 1.15% A | 1.07% | .96% | .91% | 1.27% A |
Net investment income (loss) | 2.82% A | 1.86% | 1.86% | 2.23% | 2.21% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 236,296 | $ 572,985 | $ 1,032,138 | $ 447,854 | $ 160,980 |
Portfolio turnover rate F | 39% A | 63% | 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. 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 G |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.66 | $ 15.73 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) D | .11 | .24 | .12 |
Net realized and unrealized gain (loss) | (5.01) | (3.49) | (1.86) |
Total from investment operations | (4.90) | (3.25) | (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 | - I | .01 | .01 |
Net asset value, end of period | $ 5.76 | $ 10.66 | $ 15.73 |
Total Return B, C | (45.97)% | (22.98)% | (9.91)% |
Ratios to Average Net Assets E, H | | | |
Expenses before reductions | 1.18% A | 1.13% | 1.08% A |
Expenses net of fee waivers, if any | 1.18% A | 1.13% | 1.08% A |
Expenses net of all reductions | 1.15% A | 1.10% | .97% A |
Net investment income (loss) | 2.82% A | 1.83% | 2.27% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,382 | $ 3,289 | $ 2,477 |
Portfolio turnover rate F | 39% A | 63% | 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 For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
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, 2009 (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 investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund 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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments, is included at the end of the Fund's Schedule of Investments.
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,010,085 |
Unrealized depreciation | (217,263,269) |
Net unrealized appreciation (depreciation) | $ (215,253,184) |
Cost for federal income tax purposes | $ 467,712,682 |
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.
Semiannual Report
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $73,651,271 and $158,345,538, 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:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 8,692 | $ 763 |
Class T | .25% | .25% | 9,472 | - |
Class B | .75% | .25% | 3,249 | 2,436 |
Class C | .75% | .25% | 12,241 | 4,958 |
| | | $ 33,654 | $ 8,157 |
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
by FDC |
Class A | $ 1,648 |
Class T | 380 |
Class B* | 520 |
Class C* | 471 |
| $ 3,019 |
* 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 respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
| Amount | % of
Average
Net Assets* |
Class A | $ 10,568 | .30 |
Class T | 5,926 | .31 |
Class B | 965 | .30 |
Class C | 3,629 | .30 |
International Real Estate | 532,374 | .29 |
Institutional Class | 2,928 | .29 |
| $ 556,390 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $510 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Security Lending - continued
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 $215,845.
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 $53,618 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
expense reduction |
International Real Estate | $ 649 |
Institutional Class | 5 |
| $ 654 |
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.
During the period, Lehman Brothers Holdings, Inc. and certain of its affiliates (LBHI) sought protection under the insolvency laws of their jurisdictions of organization, including the United States, the United Kingdom and Japan. At the time LBHI's insolvency proceedings were instituted, the Fund had outstanding securities trades with counterparties affiliated with LBHI. As a result of the insolvency proceedings, LBHI is unable to fulfill its commitments and, in certain cases, the Fund may have terminated its trades and related agreements with the relevant entities and, where appropriate, is in the process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to the terminated trades and agreements is immaterial.
Semiannual Report
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
From net investment income | | |
Class A | $ - | $ 129,243 |
Class T | - | 47,714 |
Class B | - | 18,349 |
Class C | - | 47,789 |
International Real Estate | - | 18,458,440 |
Institutional Class | - | 62,676 |
Total | $ - | $ 18,764,211 |
From net realized gain | | |
Class A | $ - | $ 682,544 |
Class T | - | 265,212 |
Class B | - | 121,612 |
Class C | - | 311,919 |
International Real Estate | - | 89,636,941 |
Institutional Class | - | 302,843 |
Total | $ - | $ 91,321,071 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31, 2009 | Year ended
July 31,
2008 | Six months ended January 31, 2009 | Year ended
July 31,
2008 |
Class A | | | | |
Shares sold | 159,024 | 900,194 | $ 1,283,720 | $ 11,742,685 |
Reinvestment of distributions | - | 55,923 | - | 765,385 |
Shares redeemed | (241,305) | (341,825) | (1,771,474) | (4,339,419) |
Net increase (decrease) | (82,281) | 614,292 | $ (487,754) | $ 8,168,651 |
Class T | | | | |
Shares sold | 81,988 | 633,863 | $ 681,845 | $ 7,676,814 |
Reinvestment of distributions | - | 21,513 | - | 296,970 |
Shares redeemed | (514,333) | (95,643) | (3,714,096) | (1,262,734) |
Net increase (decrease) | (432,345) | 559,733 | $ (3,032,251) | $ 6,711,050 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
| Shares | Dollars |
| Six months ended January 31, 2009 | Year ended
July 31,
2008 | Six months ended January 31, 2009 | Year ended
July 31,
2008 |
Class B | | | | |
Shares sold | 16,319 | 50,624 | $ 137,159 | $ 676,962 |
Reinvestment of distributions | - | 9,315 | - | 128,955 |
Shares redeemed | (25,396) | (45,973) | (183,423) | (599,735) |
Net increase (decrease) | (9,077) | 13,966 | $ (46,264) | $ 206,182 |
Class C | | | | |
Shares sold | 74,074 | 207,359 | $ 573,515 | $ 2,751,080 |
Reinvestment of distributions | - | 24,058 | - | 331,352 |
Shares redeemed | (74,064) | (70,253) | (570,005) | (919,320) |
Net increase (decrease) | 10 | 161,164 | $ 3,510 | $ 2,163,112 |
International Real Estate | | | | |
Shares sold | 5,041,222 | 21,686,399 | $ 39,892,022 | $ 295,025,902 |
Reinvestment of distributions | - | 7,157,452 | - | 99,352,759 |
Shares redeemed | (17,756,372) | (40,815,706) | (133,386,638) | (557,680,698) |
Net increase (decrease) | (12,715,150) | (11,971,855) | $ (93,494,616) | $ (163,302,037) |
Institutional Class | | | | |
Shares sold | 59,513 | 282,296 | $ 467,329 | $ 3,825,173 |
Reinvestment of distributions | - | 22,489 | - | 308,363 |
Shares redeemed | (128,175) | (153,644) | (1,027,097) | (1,958,706) |
Net increase (decrease) | (68,662) | 151,141 | $ (559,768) | $ 2,174,830 |
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
FIL Investment Advisers
FIL Investment Advisers (U.K.) Ltd.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
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
The Bank of New York Mellon
New York, NY
AIRE-USAN-0309
1.843181.101
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
International Real Estate
Fund - Institutional Class
Semiannual Report
January 31, 2009
Institutional Class is a
class of Fidelity®
International Real Estate Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | 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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
| Annualized
Expense Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008 to January 31, 2009 |
Class A | 1.44% | | | |
Actual | | $ 1,000.00 | $ 540.00 | $ 5.59 |
Hypothetical A | | $ 1,000.00 | $ 1,017.95 | $ 7.32 |
Class T | 1.70% | | | |
Actual | | $ 1,000.00 | $ 539.50 | $ 6.60 |
Hypothetical A | | $ 1,000.00 | $ 1,016.64 | $ 8.64 |
Class B | 2.18% | | | |
Actual | | $ 1,000.00 | $ 537.80 | $ 8.45 |
Hypothetical A | | $ 1,000.00 | $ 1,014.22 | $ 11.07 |
Class C | 2.18% | | | |
Actual | | $ 1,000.00 | $ 537.40 | $ 8.45 |
Hypothetical A | | $ 1,000.00 | $ 1,014.22 | $ 11.07 |
International Real Estate | 1.18% | | | |
Actual | | $ 1,000.00 | $ 540.30 | $ 4.58 |
Hypothetical A | | $ 1,000.00 | $ 1,019.26 | $ 6.01 |
Institutional Class | 1.18% | | | |
Actual | | $ 1,000.00 | $ 540.30 | $ 4.58 |
Hypothetical A | | $ 1,000.00 | $ 1,019.26 | $ 6.01 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Mitsubishi Estate Co. Ltd. | 8.1 | 7.2 |
Unibail-Rodamco | 7.7 | 6.7 |
Westfield Group unit | 7.0 | 7.8 |
Mitsui Fudosan Co. Ltd. | 6.6 | 5.5 |
Sun Hung Kai Properties Ltd. | 6.4 | 7.2 |
Nippon Building Fund, Inc. | 5.1 | 2.9 |
Hang Lung Properties Ltd. | 4.9 | 2.9 |
China Overseas Land & Investment Ltd. | 4.0 | 3.1 |
Land Securities Group PLC | 3.2 | 3.3 |
Japan Real Estate Investment Corp. | 2.6 | 0.0 |
| 55.6 | |
Top Five Countries as of January 31, 2009 |
(excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Japan | 29.1 | 18.5 |
Hong Kong | 23.0 | 22.2 |
Australia | 12.2 | 15.7 |
United Kingdom | 9.1 | 9.5 |
France | 7.7 | 9.5 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top REIT Sectors as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Management/Investment | 27.7 | 27.4 |
REITs - Office Buildings | 12.9 | 6.8 |
REITs - Shopping Centers | 7.0 | 5.3 |
REITs - Industrial Buildings | 2.9 | 4.9 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009 * | As of July 31, 2008 ** |
| Stocks 95.7% | | | Stocks and
Investment
Companies 96.9% | |
| Short-Term
Investments and
Net Other Assets 4.3% | | | Short-Term
Investments and
Net Other Assets 3.1% | |
* Foreign investments | 95.7% | | ** Foreign investments | 96.2% | |
Semiannual Report
Investments January 31, 2009 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.7% |
| Shares | | Value |
Australia - 12.2% |
CFS Retail Property Trust | 4,508,123 | | $ 5,084,958 |
Charter Hall Group unit | 3,006,676 | | 459,803 |
DEXUS Property Group unit | 4,193,485 | | 1,974,622 |
Goodman Group unit | 3,318,615 | | 1,453,492 |
Stockland Corp. Ltd. unit | 1,617,106 | | 3,674,048 |
Westfield Group unit | 2,301,771 | | 17,374,173 |
TOTAL AUSTRALIA | | 30,021,096 |
Bermuda - 0.2% |
HKC Holdings Ltd. | 9,736,363 | | 543,652 |
Cayman Islands - 0.7% |
New World China Land Ltd. (d) | 6,833,400 | | 1,703,126 |
China - 1.1% |
China Resources Land Ltd. | 2,402,000 | | 2,774,354 |
Finland - 1.0% |
Citycon Oyj | 1,188,403 | | 2,373,559 |
France - 7.7% |
Unibail-Rodamco | 140,217 | | 18,886,383 |
Germany - 0.1% |
DIC Asset AG | 41,460 | | 235,681 |
Greece - 0.6% |
Babis Vovos International Technical SA (a) | 235,830 | | 1,600,246 |
Hong Kong - 23.0% |
China Overseas Land & Investment Ltd. | 7,479,680 | | 9,781,988 |
Hang Lung Properties Ltd. | 5,374,000 | | 12,081,144 |
Hong Kong Land Holdings Ltd. | 2,643,000 | | 5,540,844 |
Link (REIT) | 3,258,915 | | 6,096,274 |
New World Development Co. Ltd. | 4,433,000 | | 4,202,115 |
Sino Land Co. | 3,064,174 | | 2,937,964 |
Sino-Ocean Land Holdings Ltd. | 700,000 | | 347,710 |
Sun Hung Kai Properties Ltd. | 1,782,000 | | 15,787,607 |
TOTAL HONG KONG | | 56,775,646 |
Italy - 1.0% |
Immobiliare Grande Distribuzione SpA | 1,817,700 | | 2,536,649 |
Japan - 29.1% |
Japan Real Estate Investment Corp. | 721 | | 6,498,638 |
Japan Retail Fund Investment Corp. | 609 | | 2,678,667 |
Kenedix Realty Investment Corp. (d) | 1,672 | | 4,357,687 |
Mitsubishi Estate Co. Ltd. | 1,515,000 | | 19,867,919 |
Mitsui Fudosan Co. Ltd. | 1,262,000 | | 16,276,374 |
Common Stocks - continued |
| Shares | | Value |
Japan - continued |
Nippon Accommodations Fund, Inc. | 119 | | $ 510,156 |
Nippon Building Fund, Inc. | 1,172 | | 12,574,360 |
Nomura Real Estate Office Fund, Inc. | 626 | | 3,938,541 |
NTT Urban Development Co. | 2,224 | | 1,911,153 |
ORIX JREIT, Inc. | 657 | | 3,099,042 |
TOTAL JAPAN | | 71,712,537 |
Netherlands - 2.9% |
Corio NV | 76,300 | | 3,274,465 |
Eurocommercial Properties NV (Certificaten Van Aandelen) unit | 133,432 | | 3,869,367 |
TOTAL NETHERLANDS | | 7,143,832 |
Norway - 0.3% |
Norwegian Property ASA | 966,000 | | 738,969 |
Philippines - 0.2% |
Filinvest Land, Inc. | 65,114,000 | | 588,443 |
Singapore - 5.9% |
Ascendas Real Estate Investment Trust (A-REIT) | 3,964,000 | | 3,745,004 |
CapitaCommercial Trust (REIT) | 2,849,000 | | 1,767,601 |
CapitaLand Ltd. | 3,303,900 | | 5,116,114 |
CapitaMall Trust | 3,788,000 | | 3,927,679 |
TOTAL SINGAPORE | | 14,556,398 |
Sweden - 0.6% |
Castellum AB | 215,000 | | 1,374,418 |
United Kingdom - 9.1% |
Big Yellow Group PLC (d) | 556,900 | | 1,370,409 |
British Land Co. PLC (d) | 904,600 | | 5,933,874 |
Hammerson PLC (d) | 348,500 | | 2,049,861 |
Land Securities Group PLC | 798,600 | | 7,982,276 |
Liberty International PLC (d) | 538,000 | | 2,907,121 |
Segro PLC (d) | 704,900 | | 1,632,419 |
Unite Group PLC | 651,900 | | 604,817 |
TOTAL UNITED KINGDOM | | 22,480,777 |
TOTAL COMMON STOCKS (Cost $440,956,424) | 236,045,766 |
Money Market Funds - 6.7% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.78% (b) | 7,096,247 | | $ 7,096,247 |
Fidelity Securities Lending Cash Central Fund, 0.71% (b)(c) | 9,317,485 | | 9,317,485 |
TOTAL MONEY MARKET FUNDS (Cost $16,413,732) | 16,413,732 |
TOTAL INVESTMENT PORTFOLIO - 102.4% (Cost $457,370,156) | | 252,459,498 |
NET OTHER ASSETS - (2.4)% | | (5,946,608) |
NET ASSETS - 100% | $ 246,512,890 |
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 | $ 108,499 |
Fidelity Securities Lending Cash Central Fund | 215,845 |
Total | $ 324,344 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 252,459,498 | $ 74,372,689 | $ 178,086,809 | $ - |
Income Tax Information |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $91,247,042 of losses recognized during the period November 1, 2007 to July 31, 2008. |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $51,983,093 of passive foreign investment company losses recognized during the period November 1, 2007 to July 31, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $8,973,608) - See accompanying schedule: Unaffiliated issuers (cost $440,956,424) | $ 236,045,766 | |
Fidelity Central Funds (cost $16,413,732) | 16,413,732 | |
Total Investments (cost $457,370,156) | | $ 252,459,498 |
Foreign currency held at value (cost $59,402) | | 58,969 |
Receivable for investments sold | | 3,723,429 |
Receivable for fund shares sold | | 260,380 |
Dividends receivable | | 1,435,430 |
Distributions receivable from Fidelity Central Funds | | 58,781 |
Prepaid expenses | | 3,894 |
Other receivables | | 527,523 |
Total assets | | 258,527,904 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,983,661 | |
Payable for fund shares redeemed | 363,621 | |
Accrued management fee | 159,575 | |
Distribution fees payable | 3,941 | |
Other affiliated payables | 81,641 | |
Other payables and accrued expenses | 105,090 | |
Collateral on securities loaned, at value | 9,317,485 | |
Total liabilities | | 12,015,014 |
| | |
Net Assets | | $ 246,512,890 |
Net Assets consist of: | | |
Paid in capital | | $ 739,253,141 |
Distributions in excess of net investment income | | (46,673,109) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (241,091,068) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (204,976,074) |
Net Assets | | $ 246,512,890 |
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, 2009 (Unaudited) |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($4,912,371 ÷ 855,862 shares) | | $ 5.74 |
| | |
Maximum offering price per share (100/94.25 of $5.74) | | $ 6.09 |
Class T:
Net Asset Value and redemption price per share ($1,603,748 ÷ 280,109 shares) | | $ 5.73 |
| | |
Maximum offering price per share (100/96.50 of $5.73) | | $ 5.94 |
Class B:
Net Asset Value and offering price per share ($448,449 ÷ 78,786 shares)A | | $ 5.69 |
| | |
Class C:
Net Asset Value and offering price per share ($1,869,811 ÷ 328,923 shares) A | | $ 5.68 |
| | |
International Real Estate:
Net Asset Value, offering price and redemption price per share ($236,296,223 ÷ 40,941,359 shares) | | $ 5.77 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,382,288 ÷ 239,967 shares) | | $ 5.76 |
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, 2009 (Unaudited) |
Investment Income | | |
Dividends | | $ 7,870,994 |
Interest | | 7,721 |
Income from Fidelity Central Funds | | 324,344 |
| | 8,203,059 |
Less foreign taxes withheld | | (680,031) |
Total income | | 7,523,028 |
| | |
Expenses | | |
Management fee | $ 1,349,759 | |
Transfer agent fees | 556,390 | |
Distribution fees | 33,654 | |
Accounting and security lending fees | 99,173 | |
Custodian fees and expenses | 122,572 | |
Independent trustees' compensation | 1,172 | |
Registration fees | 43,709 | |
Audit | 41,065 | |
Legal | 2,793 | |
Miscellaneous | 17,029 | |
Total expenses before reductions | 2,267,316 | |
Expense reductions | (54,272) | 2,213,044 |
Net investment income (loss) | | 5,309,984 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (138,009,092) | |
Foreign currency transactions | (281,757) | |
Total net realized gain (loss) | | (138,290,849) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (121,166,868) | |
Assets and liabilities in foreign currencies | (33,033) | |
Total change in net unrealized appreciation (depreciation) | | (121,199,901) |
Net gain (loss) | | (259,490,750) |
Net increase (decrease) in net assets resulting from operations | | $ (254,180,766) |
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, 2009 (Unaudited) | Year endedJuly 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 5,309,984 | $ 14,898,195 |
Net realized gain (loss) | (138,290,849) | (74,876,486) |
Change in net unrealized appreciation (depreciation) | (121,199,901) | (134,244,778) |
Net increase (decrease) in net assets resulting from operations | (254,180,766) | (194,223,069) |
Distributions to shareholders from net investment income | - | (18,764,211) |
Distributions to shareholders from net realized gain | - | (91,321,071) |
Total distributions | - | (110,085,282) |
Share transactions - net increase (decrease) | (97,617,143) | (143,878,212) |
Redemption fees | 87,761 | 522,585 |
Total increase (decrease) in net assets | (351,710,148) | (447,663,978) |
| | |
Net Assets | | |
Beginning of period | 598,223,038 | 1,045,887,016 |
End of period (including distributions in excess of net investment income of $46,673,109 and distributions in excess of net investment income of $51,983,093, respectively) | $ 246,512,890 | $ 598,223,038 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.63 | $ 15.71 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .10 | .20 | .11 |
Net realized and unrealized gain (loss) | (4.99) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.28) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.74 | $ 10.63 | $ 15.71 |
Total Return B, C, D | (46.00)% | (23.20)% | (10.02)% |
Ratios to Average Net Assets F,I | | | |
Expenses before reductions | 1.44% A | 1.38% | 1.37% A |
Expenses net of fee waivers, if any | 1.44% A | 1.38% | 1.37% A |
Expenses net of all reductions | 1.41% A | 1.35% | 1.26% A |
Net investment income (loss) | 2.56% A | 1.58% | 2.08% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 4,912 | $ 9,976 | $ 5,087 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.62 | $ 15.70 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .09 | .17 | .10 |
Net realized and unrealized gain (loss) | (4.98) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.31) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.73 | $ 10.62 | $ 15.70 |
Total ReturnB, C, D | (46.05)% | (23.39)% | (10.08)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 1.70% A | 1.64% | 1.61% A |
Expenses net of fee waivers, if any | 1.70% A | 1.64% | 1.61% A |
Expenses net of all reductions | 1.67% A | 1.60% | 1.51% A |
Net investment income (loss) | 2.30% A | 1.32% | 1.90% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,604 | $ 7,566 | $ 2,398 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.58 | $ 15.67 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | (4.96) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.37) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.69 | $ 10.58 | $ 15.67 |
Total Return B, C, D | (46.22)% | (23.80)% | (10.25)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 2.18% A | 2.14% | 2.11% A |
Expenses net of fee waivers, if any | 2.18% A | 2.14% | 2.11% A |
Expenses net of all reductions | 2.15% A | 2.11% | 2.01% A |
Net investment income (loss) | 1.81% A | .82% | 1.38% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 448 | $ 930 | $ 1,158 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 H |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.57 | $ 15.67 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) E | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | (4.96) | (3.48) | (1.87) |
Total from investment operations | (4.89) | (3.37) | (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 | - J | .01 | .01 |
Net asset value, end of period | $ 5.68 | $ 10.57 | $ 15.67 |
Total Return B, C, D | (46.26)% | (23.78)% | (10.25)% |
Ratios to Average Net Assets F, I | | | |
Expenses before reductions | 2.18% A | 2.14% | 2.10% A |
Expenses net of fee waivers, if any | 2.18% A | 2.14% | 2.10% A |
Expenses net of all reductions | 2.15% A | 2.11% | 2.00% A |
Net investment income (loss) | 1.81% A | .82% | 1.35% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,870 | $ 3,477 | $ 2,629 |
Portfolio turnover rate G | 39% A | 63% | 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 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.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - International Real Estate
| Six months ended January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | | |
Net asset value, beginning of period | $ 10.68 | $ 15.73 | $ 14.69 | $ 12.09 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .11 | .25 | .31 | .30 | .23 |
Net realized and unrealized gain (loss) | (5.02) | (3.50) | 2.35 | 2.93 | 1.91 |
Total from investment operations | (4.91) | (3.25) | 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 | - I | .01 | .02 | .01 | .01 |
Net asset value, end of period | $ 5.77 | $ 10.68 | $ 15.73 | $ 14.69 | $ 12.09 |
Total Return B, C | (45.97)% | (22.97)% | 19.01% | 27.85% | 21.53% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.18% A | 1.11% | 1.07% | 1.12% | 1.29% A |
Expenses net of fee waivers, if any | 1.18% A | 1.10% | 1.06% | 1.12% | 1.29% A |
Expenses net of all reductions | 1.15% A | 1.07% | .96% | .91% | 1.27% A |
Net investment income (loss) | 2.82% A | 1.86% | 1.86% | 2.23% | 2.21% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 236,296 | $ 572,985 | $ 1,032,138 | $ 447,854 | $ 160,980 |
Portfolio turnover rate F | 39% A | 63% | 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. 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 G |
Selected Per-Share Data | | | |
Net asset value, beginning of period | $ 10.66 | $ 15.73 | $ 17.46 |
Income from Investment Operations | | | |
Net investment income (loss) D | .11 | .24 | .12 |
Net realized and unrealized gain (loss) | (5.01) | (3.49) | (1.86) |
Total from investment operations | (4.90) | (3.25) | (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 | - I | .01 | .01 |
Net asset value, end of period | $ 5.76 | $ 10.66 | $ 15.73 |
Total Return B, C | (45.97)% | (22.98)% | (9.91)% |
Ratios to Average Net Assets E, H | | | |
Expenses before reductions | 1.18% A | 1.13% | 1.08% A |
Expenses net of fee waivers, if any | 1.18% A | 1.13% | 1.08% A |
Expenses net of all reductions | 1.15% A | 1.10% | .97% A |
Net investment income (loss) | 2.82% A | 1.83% | 2.27% A |
Supplemental Data | | | |
Net assets, end of period (000 omitted) | $ 1,382 | $ 3,289 | $ 2,477 |
Portfolio turnover rate F | 39% A | 63% | 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 For the period April 4, 2007 (commencement of sale of shares) to July 31, 2007.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
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, 2009 (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 investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund 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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments, is included at the end of the Fund's Schedule of Investments.
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,010,085 |
Unrealized depreciation | (217,263,269) |
Net unrealized appreciation (depreciation) | $ (215,253,184) |
Cost for federal income tax purposes | $ 467,712,682 |
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.
Semiannual Report
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $73,651,271 and $158,345,538, 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:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 8,692 | $ 763 |
Class T | .25% | .25% | 9,472 | - |
Class B | .75% | .25% | 3,249 | 2,436 |
Class C | .75% | .25% | 12,241 | 4,958 |
| | | $ 33,654 | $ 8,157 |
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
by FDC |
Class A | $ 1,648 |
Class T | 380 |
Class B* | 520 |
Class C* | 471 |
| $ 3,019 |
* 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 respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
| Amount | % of
Average
Net Assets* |
Class A | $ 10,568 | .30 |
Class T | 5,926 | .31 |
Class B | 965 | .30 |
Class C | 3,629 | .30 |
International Real Estate | 532,374 | .29 |
Institutional Class | 2,928 | .29 |
| $ 556,390 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $510 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Security Lending - continued
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 $215,845.
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 $53,618 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
expense reduction |
International Real Estate | $ 649 |
Institutional Class | 5 |
| $ 654 |
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.
During the period, Lehman Brothers Holdings, Inc. and certain of its affiliates (LBHI) sought protection under the insolvency laws of their jurisdictions of organization, including the United States, the United Kingdom and Japan. At the time LBHI's insolvency proceedings were instituted, the Fund had outstanding securities trades with counterparties affiliated with LBHI. As a result of the insolvency proceedings, LBHI is unable to fulfill its commitments and, in certain cases, the Fund may have terminated its trades and related agreements with the relevant entities and, where appropriate, is in the process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to the terminated trades and agreements is immaterial.
Semiannual Report
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
From net investment income | | |
Class A | $ - | $ 129,243 |
Class T | - | 47,714 |
Class B | - | 18,349 |
Class C | - | 47,789 |
International Real Estate | - | 18,458,440 |
Institutional Class | - | 62,676 |
Total | $ - | $ 18,764,211 |
From net realized gain | | |
Class A | $ - | $ 682,544 |
Class T | - | 265,212 |
Class B | - | 121,612 |
Class C | - | 311,919 |
International Real Estate | - | 89,636,941 |
Institutional Class | - | 302,843 |
Total | $ - | $ 91,321,071 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31, 2009 | Year ended
July 31,
2008 | Six months ended January 31, 2009 | Year ended
July 31,
2008 |
Class A | | | | |
Shares sold | 159,024 | 900,194 | $ 1,283,720 | $ 11,742,685 |
Reinvestment of distributions | - | 55,923 | - | 765,385 |
Shares redeemed | (241,305) | (341,825) | (1,771,474) | (4,339,419) |
Net increase (decrease) | (82,281) | 614,292 | $ (487,754) | $ 8,168,651 |
Class T | | | | |
Shares sold | 81,988 | 633,863 | $ 681,845 | $ 7,676,814 |
Reinvestment of distributions | - | 21,513 | - | 296,970 |
Shares redeemed | (514,333) | (95,643) | (3,714,096) | (1,262,734) |
Net increase (decrease) | (432,345) | 559,733 | $ (3,032,251) | $ 6,711,050 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
| Shares | Dollars |
| Six months ended January 31, 2009 | Year ended
July 31,
2008 | Six months ended January 31, 2009 | Year ended
July 31,
2008 |
Class B | | | | |
Shares sold | 16,319 | 50,624 | $ 137,159 | $ 676,962 |
Reinvestment of distributions | - | 9,315 | - | 128,955 |
Shares redeemed | (25,396) | (45,973) | (183,423) | (599,735) |
Net increase (decrease) | (9,077) | 13,966 | $ (46,264) | $ 206,182 |
Class C | | | | |
Shares sold | 74,074 | 207,359 | $ 573,515 | $ 2,751,080 |
Reinvestment of distributions | - | 24,058 | - | 331,352 |
Shares redeemed | (74,064) | (70,253) | (570,005) | (919,320) |
Net increase (decrease) | 10 | 161,164 | $ 3,510 | $ 2,163,112 |
International Real Estate | | | | |
Shares sold | 5,041,222 | 21,686,399 | $ 39,892,022 | $ 295,025,902 |
Reinvestment of distributions | - | 7,157,452 | - | 99,352,759 |
Shares redeemed | (17,756,372) | (40,815,706) | (133,386,638) | (557,680,698) |
Net increase (decrease) | (12,715,150) | (11,971,855) | $ (93,494,616) | $ (163,302,037) |
Institutional Class | | | | |
Shares sold | 59,513 | 282,296 | $ 467,329 | $ 3,825,173 |
Reinvestment of distributions | - | 22,489 | - | 308,363 |
Shares redeemed | (128,175) | (153,644) | (1,027,097) | (1,958,706) |
Net increase (decrease) | (68,662) | 151,141 | $ (559,768) | $ 2,174,830 |
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
FIL Investment Advisers
FIL Investment Advisers (U.K.) Ltd.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
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
The Bank of New York Mellon
New York, NY
AIREI-USAN-0309
1.843174.101
Fidelity®
Real Estate Income
Fund
Semiannual Report
January 31, 2009
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | Notes to the financial statements. |
Report of Independent Registered Public Accounting Firm | <Click Here> | |
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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Shareholder Expense Example - continued
| Annualized Expense Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008
to January 31, 2009 |
Actual | .97% | $ 1,000.00 | $ 748.30 | $ 4.27 |
Hypothetical (5% return per year before expenses) | | $ 1,000.00 | $ 1,020.32 | $ 4.94 |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Five Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
MFA Mortgage Investments, Inc. | 2.3 | 2.2 |
MFA Mortgage Investments, Inc. Series A, 8.50% | 1.8 | 1.4 |
Annaly Capital Management, Inc. | 1.5 | 1.8 |
Anworth Mortgage Asset Corp. Series A, 8.625% | 1.5 | 1.2 |
Ventas, Inc. | 1.4 | 1.1 |
| 8.5 | |
Top 5 Bonds as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Ventas Realty LP 9% 5/1/12 | 2.1 | 1.5 |
Senior Housing Properties Trust 8.625% 1/15/12 | 1.5 | 1.3 |
Ventas, Inc. 3.875% 11/15/11 | 1.3 | 0.0 |
Omega Healthcare Investors, Inc. 7% 4/1/14 | 1.3 | 1.0 |
ERP Operating LP 3.85% 8/15/26 | 1.3 | 0.0 |
| 7.5 | |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009* | As of July 31, 2008** |
| Common Stocks 15.6% | | | Common Stocks 19.7% | |
 | Preferred Stocks 13.5% | |  | Preferred Stocks 16.3% | |
 | Bonds 52.4% | | | Bonds 51.6% | |
 | Convertible
Securities 11.9% | | | Convertible
Securities 3.9% | |
 | Other Investments 1.1% | | | Other Investments 2.4% | |
| Short-Term
Investments and
Net Other Assets 5.5% | | | Short-Term
Investments and
Net Other Assets 6.1% | |
* Foreign investments | 3.1% | | ** Foreign investments | 4.9% | |
Semiannual Report
Investments January 31, 2009
Showing Percentage of Net Assets
Common Stocks - 15.6% |
| Shares | | Value |
CONSUMER DISCRETIONARY - 0.3% |
Hotels, Restaurants & Leisure - 0.3% |
Red Lion Hotels Corp. (a) | 56,870 | | $ 126,820 |
Starwood Hotels & Resorts Worldwide, Inc. | 57,680 | | 872,122 |
| | 998,942 |
FINANCIALS - 14.3% |
Capital Markets - 0.1% |
W.P. Carey & Co. LLC | 17,900 | | 384,671 |
Real Estate Investment Trusts - 14.1% |
Acadia Realty Trust (SBI) | 97,049 | | 1,132,562 |
Alexandria Real Estate Equities, Inc. | 2,900 | | 172,086 |
AMB Property Corp. (SBI) | 114,900 | | 1,852,188 |
Annaly Capital Management, Inc. | 277,150 | | 4,196,051 |
Apartment Investment & Management Co. Class A | 47,741 | | 424,417 |
AvalonBay Communities, Inc. | 29,325 | | 1,519,328 |
Boston Properties, Inc. | 5,800 | | 251,140 |
Camden Property Trust (SBI) | 20,500 | | 540,380 |
CapLease, Inc. | 113,000 | | 180,800 |
Cedar Shopping Centers, Inc. | 10,500 | | 64,365 |
Corporate Office Properties Trust (SBI) | 12,500 | | 329,750 |
Cypress Sharpridge Investments, Inc. (e) | 146,458 | | 1,171,664 |
Cypress Sharpridge Investments, Inc. warrants 4/30/11 (a)(e) | 40,000 | | 0 |
Developers Diversified Realty Corp. | 80,600 | | 386,880 |
DiamondRock Hospitality Co. | 52,200 | | 214,020 |
Duke Realty LP | 30,600 | | 281,826 |
Equity Lifestyle Properties, Inc. | 45,730 | | 1,725,393 |
Equity Residential (SBI) | 81,500 | | 1,950,295 |
Federal Realty Investment Trust (SBI) | 10,500 | | 531,615 |
HCP, Inc. | 44,580 | | 1,040,497 |
Highwoods Properties, Inc. (SBI) | 80,700 | | 1,820,592 |
Host Hotels & Resorts, Inc. | 46,749 | | 251,510 |
Inland Real Estate Corp. | 25,600 | | 252,672 |
Kilroy Realty Corp. | 14,200 | | 324,612 |
Kimco Realty Corp. | 64,800 | | 931,824 |
LaSalle Hotel Properties (SBI) | 21,600 | | 179,928 |
Liberty Property Trust (SBI) | 13,000 | | 260,000 |
MFA Mortgage Investments, Inc. | 1,154,881 | | 6,617,460 |
National Retail Properties, Inc. | 29,000 | | 418,470 |
Nationwide Health Properties, Inc. | 59,080 | | 1,508,312 |
ProLogis Trust | 108,866 | | 1,089,749 |
Regency Centers Corp. | 39,500 | | 1,394,350 |
Simon Property Group, Inc. | 12,704 | | 546,018 |
Common Stocks - continued |
| Shares | | Value |
FINANCIALS - continued |
Real Estate Investment Trusts - continued |
Sunstone Hotel Investors, Inc. | 66,000 | | $ 284,460 |
UDR, Inc. | 129,600 | | 1,520,208 |
Ventas, Inc. | 141,580 | | 3,945,835 |
Vornado Realty Trust | 16,500 | | 838,365 |
| | 40,149,622 |
Real Estate Management & Development - 0.1% |
Meruelo Maddux Properties, Inc. (a) | 897,434 | | 367,948 |
TOTAL FINANCIALS | | 40,902,241 |
HEALTH CARE - 1.0% |
Health Care Providers & Services - 1.0% |
Brookdale Senior Living, Inc. | 80,300 | | 546,040 |
Capital Senior Living Corp. (a) | 108,000 | | 284,040 |
Emeritus Corp. (a) | 143,000 | | 1,182,610 |
Sun Healthcare Group, Inc. (a) | 65,300 | | 739,849 |
| | 2,752,539 |
TOTAL COMMON STOCKS (Cost $61,775,375) | 44,653,722 |
Preferred Stocks - 13.8% |
| | | |
Convertible Preferred Stocks - 0.3% |
FINANCIALS - 0.3% |
Real Estate Investment Trusts - 0.3% |
HRPT Properties Trust 6.50% | 80,000 | | 744,000 |
Lexington Corporate Properties Trust Series C 6.50% | 7,800 | | 126,750 |
| | 870,750 |
Nonconvertible Preferred Stocks - 13.5% |
FINANCIALS - 13.5% |
Diversified Financial Services - 0.3% |
DRA CRT Acquisition Corp. Series A, 8.50% | 25,000 | | 100,000 |
Red Lion Hotels Capital Trust 9.50% | 77,750 | | 894,125 |
W2007 Grace Acquisition I, Inc. Series B, 8.75% | 35,300 | | 28,681 |
| | 1,022,806 |
Real Estate Investment Trusts - 13.1% |
Alexandria Real Estate Equities, Inc. Series C, 8.375% | 67,000 | | 1,239,500 |
Preferred Stocks - continued |
| Shares | | Value |
Nonconvertible Preferred Stocks - continued |
FINANCIALS - continued |
Real Estate Investment Trusts - continued |
American Home Mortgage Investment Corp.: | | | |
Series A, 9.75% (c) | 120,300 | | $ 10,827 |
Series B, 9.25% (c) | 124,100 | | 12 |
Annaly Capital Management, Inc. Series A, 7.875% | 144,900 | | 2,934,225 |
Anworth Mortgage Asset Corp. Series A, 8.625% | 219,327 | | 4,167,213 |
Apartment Investment & Management Co.: | | | |
Series G, 9.375% | 66,600 | | 1,126,872 |
Series T, 8.00% | 57,500 | | 922,300 |
Ashford Hospitality Trust, Inc. Series A, 8.55% | 31,795 | | 238,463 |
Cedar Shopping Centers, Inc. 8.875% | 66,000 | | 1,039,500 |
CenterPoint Properties Trust Series D, 5.377% | 3,575 | | 1,072,500 |
Colonial Properties Trust (depositary shares) Series D, 8.125% | 39,000 | | 565,890 |
Cousins Properties, Inc. Series A, 7.75% | 71,700 | | 1,021,725 |
Developers Diversified Realty Corp. (depositary shares) Series G, 8.00% | 25,500 | | 188,700 |
Digital Realty Trust, Inc. Series A, 8.50% | 75,000 | | 1,338,750 |
Duke Realty LP 8.375% | 62,800 | | 1,029,292 |
Eagle Hospitality Properties Trust, Inc. 8.25% (a) | 24,000 | | 12,000 |
First Industrial Realty Trust, Inc. Series J, 7.25% | 3,500 | | 32,200 |
Glimcher Realty Trust Series F, 8.75% | 27,000 | | 148,230 |
HomeBanc Mortgage Corp. Series A, 10.00% (c) | 104,685 | | 628 |
Hospitality Properties Trust: | | | |
Series B, 8.875% | 71,575 | | 1,144,484 |
Series C, 7.00% | 59,000 | | 838,980 |
Host Hotels & Resorts, Inc. Series E, 8.875% | 38,800 | | 679,000 |
HRPT Properties Trust Series B, 8.75% | 23,961 | | 349,831 |
Innkeepers USA Trust Series C, 8.00% | 62,400 | | 34,320 |
Kimco Realty Corp. Series G, 7.75% | 73,500 | | 1,323,000 |
LaSalle Hotel Properties: | | | |
Series B, 8.375% | 21,800 | | 279,040 |
Series E, 8.00% | 24,100 | | 286,790 |
Series G, 7.25% | 15,660 | | 172,260 |
LBA Realty Fund II: | | | |
Series A, 8.75% (e) | 69,000 | | 1,518,000 |
Series B, 7.625% | 31,240 | | 249,920 |
Lexington Corporate Properties Trust Series B, 8.05% | 29,000 | | 276,080 |
Lexington Realty Trust 7.55% | 23,800 | | 226,100 |
LTC Properties, Inc. Series F, 8.00% | 54,300 | | 1,045,275 |
MFA Mortgage Investments, Inc. Series A, 8.50% | 274,400 | | 5,202,624 |
Preferred Stocks - continued |
| Shares | | Value |
Nonconvertible Preferred Stocks - continued |
FINANCIALS - continued |
Real Estate Investment Trusts - continued |
Mid-America Apartment Communities, Inc. Series H, 8.30% | 32,800 | | $ 738,000 |
Newcastle Investment Corp.: | | | |
Series B, 9.75% | 161,900 | | 323,800 |
Series D, 8.375% | 24,300 | | 43,740 |
Omega Healthcare Investors, Inc. Series D, 8.375% | 59,600 | | 1,206,900 |
ProLogis Trust Series C, 8.54% | 6,446 | | 182,680 |
PS Business Parks, Inc.: | | | |
(depositary shares) Series L, 7.60% | 5,890 | | 103,075 |
Series P, 6.70% | 35,000 | | 572,250 |
Realty Income Corp. 6.75% | 600 | | 11,100 |
Regency Centers Corp. 7.25% | 10,000 | | 180,000 |
Saul Centers, Inc. 8.00% | 93,700 | | 1,475,775 |
Strategic Hotel & Resorts, Inc. 8.50% (e) | 119,500 | | 836,500 |
Sunstone Hotel Investors, Inc. Series A, 8.00% | 20,000 | | 224,000 |
Weingarten Realty Investors (SBI) Series F, 6.50% | 56,230 | | 756,294 |
| | 37,368,645 |
Thrifts & Mortgage Finance - 0.1% |
MFH Financial Trust I 9.50% (e) | 22,660 | | 203,940 |
TOTAL FINANCIALS | | 38,595,391 |
TOTAL PREFERRED STOCKS (Cost $82,807,634) | 39,466,141 |
Corporate Bonds - 46.5% |
| Principal Amount (d) | | |
Convertible Bonds - 11.6% |
FINANCIALS - 11.6% |
Real Estate Investment Trusts - 9.6% |
Acadia Realty Trust 3.75% 12/15/26 | | $ 2,250,000 | | 1,589,355 |
Alexandria Real Estate Equities, Inc. 3.7% 1/15/27 (e) | | 1,920,000 | | 1,410,240 |
Anthracite Capital, Inc.: | | | | |
11.75% 9/1/27 (e) | | 500,000 | | 78,350 |
11.75% 9/1/27 | | 300,000 | | 47,010 |
BioMed Realty LP 4.5% 10/1/26 (e) | | 1,000,000 | | 471,600 |
Brandywine Operating Partnership LP 3.875% 10/15/26 | | 1,000,000 | | 605,700 |
Corporate Bonds - continued |
| Principal Amount (d) | | Value |
Convertible Bonds - continued |
FINANCIALS - continued |
Real Estate Investment Trusts - continued |
BRE Properties, Inc. 4.125% 8/15/26 | | $ 3,600,000 | | $ 2,967,696 |
CapLease, Inc. 7.5% 10/1/27 (e) | | 4,180,000 | | 1,679,524 |
Corporate Office Properties LP 3.5% 9/15/26 (e) | | 1,100,000 | | 763,897 |
Duke Realty LP 3.75% 12/1/11 (e) | | 650,000 | | 428,220 |
Hospitality Properties Trust 3.8% 3/15/27 | | 2,000,000 | | 1,290,000 |
Lexington Master Ltd. Partnership 5.45% 1/15/27 (e) | | 3,050,000 | | 1,936,750 |
MPT Operating Partnership LP 9.25% 4/1/13 (e) | | 1,000,000 | | 510,500 |
National Retail Properties, Inc. 3.95% 9/15/26 | | 1,400,000 | | 1,109,080 |
PREIT Associates LP 4% 6/1/12 (e) | | 1,000,000 | | 297,970 |
ProLogis Trust 1.875% 11/15/37 | | 1,950,000 | | 904,644 |
SL Green Realty Corp. 3% 3/30/27 (e) | | 500,000 | | 303,299 |
The Macerich Co. 3.25% 3/15/12 (e) | | 1,500,000 | | 757,500 |
United Dominion Realty Trust, Inc. 3.625% 9/15/11 | | 3,000,000 | | 2,437,500 |
Ventas, Inc. 3.875% 11/15/11 (e) | | 4,565,000 | | 3,728,030 |
Vornado Realty Trust 2.85% 4/1/27 | | 1,190,000 | | 893,416 |
Washington (REIT): | | | | |
3.875% 9/15/26 | | 1,600,000 | | 1,320,000 |
3.875% 9/15/26 | | 1,250,000 | | 1,031,250 |
Weingarten Realty Investors 3.95% 8/1/26 | | 1,300,000 | | 904,238 |
| | 27,465,769 |
Real Estate Management & Development - 2.0% |
ERP Operating LP 3.85% 8/15/26 | | 4,000,000 | | 3,552,400 |
First Potomac Realty Investment LP 4% 12/15/11 (e) | | 1,000,000 | | 676,800 |
Forest City Enterprises, Inc. 3.625% 10/15/11 | | 600,000 | | 359,400 |
Kilroy Realty LP 3.25% 4/15/12 (e) | | 1,730,000 | | 1,101,145 |
| | 5,689,745 |
TOTAL FINANCIALS | | 33,155,514 |
Nonconvertible Bonds - 34.9% |
CONSUMER DISCRETIONARY - 5.6% |
Hotels, Restaurants & Leisure - 0.8% |
Host Marriott LP 7% 8/15/12 | | 2,000,000 | | 1,795,000 |
Times Square Hotel Trust 8.528% 8/1/26 (e) | | 879,733 | | 571,826 |
| | 2,366,826 |
Corporate Bonds - continued |
| Principal Amount (d) | | Value |
Nonconvertible Bonds - continued |
CONSUMER DISCRETIONARY - continued |
Household Durables - 4.8% |
D.R. Horton, Inc.: | | | | |
4.875% 1/15/10 | | $ 1,000,000 | | $ 940,000 |
5.375% 6/15/12 | | 600,000 | | 480,000 |
K. Hovnanian Enterprises, Inc.: | | | | |
6% 1/15/10 | | 420,000 | | 352,800 |
6.25% 1/15/15 | | 250,000 | | 70,000 |
6.25% 1/15/16 | | 1,000,000 | | 290,000 |
7.5% 5/15/16 | | 1,000,000 | | 270,000 |
7.75% 5/15/13 | | 4,000,000 | | 980,000 |
KB Home: | | | | |
5.875% 1/15/15 | | 2,000,000 | | 1,400,000 |
6.25% 6/15/15 | | 3,500,000 | | 2,537,500 |
Kimball Hill, Inc. 10.5% 12/15/12 (c) | | 4,625,000 | | 463 |
Lennar Corp.: | | | | |
5.5% 9/1/14 | | 1,000,000 | | 650,000 |
5.95% 10/17/11 | | 1,000,000 | | 810,000 |
M/I Homes, Inc. 6.875% 4/1/12 | | 2,150,000 | | 1,139,500 |
Meritage Homes Corp. 6.25% 3/15/15 | | 2,500,000 | | 1,537,500 |
Stanley-Martin Communities LLC 9.75% 8/15/15 | | 4,620,000 | | 1,386,000 |
Toll Brothers, Inc. 8.25% 2/1/11 | | 1,000,000 | | 975,000 |
| | 13,818,763 |
TOTAL CONSUMER DISCRETIONARY | | 16,185,589 |
CONSUMER STAPLES - 0.4% |
Food & Staples Retailing - 0.4% |
Ahold Lease Series 2001 A1 pass thru trust certificates 7.82% 1/2/20 | | 1,266,306 | | 1,063,697 |
FINANCIALS - 28.2% |
Real Estate Investment Trusts - 23.6% |
AMB Property LP 6.3% 6/1/13 | | 1,000,000 | | 715,641 |
AvalonBay Communities, Inc.: | | | | |
4.95% 3/15/13 | | 500,000 | | 433,547 |
5.5% 1/15/12 | | 1,000,000 | | 925,522 |
6.625% 9/15/11 | | 894,000 | | 857,410 |
Brandywine Operating Partnership LP: | | | | |
4.5% 11/1/09 | | 1,000,000 | | 944,308 |
5.75% 4/1/12 | | 1,000,000 | | 560,000 |
Corporate Bonds - continued |
| Principal Amount (d) | | Value |
Nonconvertible Bonds - continued |
FINANCIALS - continued |
Real Estate Investment Trusts - continued |
BRE Properties, Inc. 5.75% 9/1/09 | | $ 1,800,000 | | $ 1,785,303 |
Camden Property Trust: | | | | |
4.375% 1/15/10 | | 2,370,000 | | 2,194,949 |
4.7% 7/15/09 | | 500,000 | | 491,285 |
Colonial Properties Trust 6.875% 8/15/12 | | 1,000,000 | | 765,647 |
Colonial Realty LP 6.05% 9/1/16 | | 1,000,000 | | 598,614 |
Commercial Net Lease Realty, Inc.: | | | | |
6.15% 12/15/15 | | 100,000 | | 71,819 |
6.25% 6/15/14 | | 500,000 | | 384,361 |
Developers Diversified Realty Corp.: | | | | |
4.625% 8/1/10 | | 500,000 | | 364,514 |
5% 5/3/10 | | 1,000,000 | | 720,495 |
5.375% 10/15/12 | | 500,000 | | 236,463 |
7.5% 7/15/18 | | 200,000 | | 82,128 |
Duke Realty LP: | | | | |
5.25% 1/15/10 | | 200,000 | | 186,469 |
5.625% 8/15/11 | | 560,000 | | 452,514 |
Federal Realty Investment Trust 4.5% 2/15/11 | | 1,500,000 | | 1,286,175 |
Health Care Property Investors, Inc.: | | | | |
6% 3/1/15 | | 500,000 | | 336,405 |
6% 1/30/17 | | 1,000,000 | | 617,569 |
6.3% 9/15/16 | | 4,500,000 | | 2,964,533 |
Health Care REIT, Inc.: | | | | |
6% 11/15/13 | | 1,000,000 | | 789,322 |
6.2% 6/1/16 | | 750,000 | | 563,767 |
8% 9/12/12 | | 2,450,000 | | 2,149,547 |
Healthcare Realty Trust, Inc. 8.125% 5/1/11 | | 2,290,000 | | 2,113,123 |
Highwoods/Forsyth LP 5.85% 3/15/17 | | 1,000,000 | | 580,000 |
HMB Capital Trust V 5.5963% 12/15/36 (c)(e)(f) | | 2,530,000 | | 253 |
Hospitality Properties Trust: | | | | |
5.625% 3/15/17 | | 915,000 | | 530,700 |
6.75% 2/15/13 | | 610,000 | | 399,473 |
Host Hotels & Resorts LP 6.875% 11/1/14 | | 500,000 | | 410,000 |
HRPT Properties Trust: | | | | |
2.5213% 3/16/11 (f) | | 787,000 | | 546,825 |
6.5% 1/15/13 | | 200,000 | | 130,037 |
iStar Financial, Inc.: | | | | |
2.3363% 9/15/09 (f) | | 1,000,000 | | 650,000 |
2.5356% 3/9/10 (f) | | 1,500,000 | | 825,000 |
Corporate Bonds - continued |
| Principal Amount (d) | | Value |
Nonconvertible Bonds - continued |
FINANCIALS - continued |
Real Estate Investment Trusts - continued |
iStar Financial, Inc.: - continued | | | | |
5.125% 4/1/11 | | $ 2,500,000 | | $ 1,050,000 |
5.375% 4/15/10 | | 2,000,000 | | 1,100,000 |
5.8% 3/15/11 | | 4,950,000 | | 2,079,000 |
Kimco Realty Corp. 6.875% 2/10/09 | | 1,000,000 | | 999,605 |
Liberty Property LP 6.375% 8/15/12 | | 750,000 | | 622,500 |
Nationwide Health Properties, Inc.: | | | | |
6.25% 2/1/13 | | 1,000,000 | | 855,538 |
6.5% 7/15/11 | | 2,000,000 | | 1,805,632 |
8.25% 7/1/12 | | 1,300,000 | | 1,092,602 |
Omega Healthcare Investors, Inc. 7% 4/1/14 | | 3,970,000 | | 3,652,400 |
Reckson Operating Partnership LP 7.75% 3/15/09 | | 1,600,000 | | 1,585,608 |
Rouse Co.: | | | | |
5.375% 11/26/13 | | 3,600,000 | | 1,242,000 |
7.2% 9/15/12 | | 3,920,000 | | 1,332,800 |
Rouse Co. LP/TRC, Inc. 6.75% 5/1/13 (e) | | 2,250,000 | | 765,000 |
Senior Housing Properties Trust: | | | | |
7.875% 4/15/15 | | 355,000 | | 284,000 |
8.625% 1/15/12 | | 5,050,000 | | 4,393,500 |
Shurgard Storage Centers, Inc.: | | | | |
5.875% 3/15/13 | | 1,000,000 | | 757,153 |
7.75% 2/22/11 | | 500,000 | | 455,566 |
Simon Property Group LP 4.875% 8/15/10 | | 2,448,000 | | 2,350,080 |
UDR, Inc. 5.5% 4/1/14 | | 500,000 | | 380,657 |
United Dominion Realty Trust, Inc.: | | | | |
5% 1/15/12 | | 1,000,000 | | 766,750 |
5.13% 1/15/14 | | 500,000 | | 331,727 |
6.05% 6/1/13 | | 2,500,000 | | 1,821,183 |
6.5% 6/15/09 | | 325,000 | | 317,436 |
Ventas Realty LP: | | | | |
6.625% 10/15/14 | | 3,160,000 | | 2,780,800 |
9% 5/1/12 | | 6,011,000 | | 5,980,945 |
Vornado Realty LP 4.5% 8/15/09 | | 1,000,000 | | 968,481 |
| | 67,434,681 |
Real Estate Management & Development - 3.7% |
American Real Estate Partners/American Real Estate Finance Corp. 8.125% 6/1/12 | | 2,190,000 | | 1,888,875 |
Corporate Bonds - continued |
| Principal Amount (d) | | Value |
Nonconvertible Bonds - continued |
FINANCIALS - continued |
Real Estate Management & Development - continued |
ERP Operating LP: | | | | |
5.2% 4/1/13 | | $ 1,000,000 | | $ 885,378 |
5.5% 10/1/12 | | 853,000 | | 782,886 |
First Industrial LP: | | | | |
5.25% 6/15/09 | | 1,000,000 | | 972,223 |
7.375% 3/15/11 | | 2,507,000 | | 1,932,717 |
Post Apartment Homes LP: | | | | |
5.125% 10/12/11 | | 2,500,000 | | 1,982,355 |
7.7% 12/20/10 | | 2,500,000 | | 2,217,200 |
| | 10,661,634 |
Thrifts & Mortgage Finance - 0.9% |
Wrightwood Capital LLC 9% 6/1/14 (e) | | 4,000,000 | | 2,470,000 |
TOTAL FINANCIALS | | 80,566,315 |
HEALTH CARE - 0.7% |
Health Care Providers & Services - 0.7% |
Skilled Healthcare Group, Inc. 11% 1/15/14 | | 500,000 | | 480,000 |
Sun Healthcare Group, Inc. 9.125% 4/15/15 | | 1,650,000 | | 1,464,375 |
| | 1,944,375 |
TOTAL NONCONVERTIBLE BONDS | | 99,759,976 |
TOTAL CORPORATE BONDS (Cost $182,062,270) | 132,915,490 |
Asset-Backed Securities - 4.3% |
|
American Tower Trust I Series 2007-1A Class D, 5.9568% 4/15/37 (e) | | 4,000,000 | | 3,020,000 |
Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M9, 2.8894% 10/25/34 (e)(f) | | 395,497 | | 4,771 |
Anthracite CDO II Ltd. Series 2002-2A Class F, 7.6% 12/24/37 (e) | | 2,260,000 | | 1,055,420 |
Anthracite CDO III Ltd./Anthracite CDO III Corp.
Series 2004-1A Class A, 0.7163% 3/23/19 (e)(f) | | 437,564 | | 301,068 |
Capital Trust RE CDO Ltd. Series 2005-1A Class D, 1.8594% 3/20/50 (e)(f) | | 2,250,000 | | 450,000 |
Asset-Backed Securities - continued |
| Principal Amount (d) | | Value |
Capital Trust RE CDO Ltd./Capital Trust RE CDO Corp. Series 2005-3A Class A2, 5.16% 6/25/35 (e) | | $ 1,000,000 | | $ 757,560 |
CapitalSource Real Estate Loan Trust Series 2006-1A Class A2A, 1.3925% 1/20/37 (e)(f) | | 1,485,795 | | 371,449 |
Conseco Finance Securitizations Corp. Series 2002-2 Class M2, 9.163% 3/1/33 | | 500,000 | | 199,153 |
Crest Clarendon Street Ltd./Crest Clarendon Corp. Series 2002-1A: | | | | |
Class B1, 6.065% 12/28/35 (e) | | 1,570,000 | | 706,500 |
Class B2, 2.8163% 12/28/35 (e)(f) | | 1,575,000 | | 645,750 |
Class D, 9% 12/28/35 (e) | | 500,000 | | 80,000 |
Crest Dartmouth Street Ltd./Crest Dartmouth Street Corp. Series 2003-1A Class D, 9% 6/28/38 (e) | | 850,000 | | 417,180 |
Crown Castle Towers LLC/Crown Atlantic Holdings Sub LLC/Crown Communication, Inc. Series 2005-1
Class D, 5.612% 6/15/35 (e) | | 2,000,000 | | 1,400,000 |
Fairfield Street Solar Corp. Series 2004-1A Class E1, 5.5463% 11/28/39 (e)(f) | | 550,000 | | 68,750 |
Green Tree Financial Corp. Series 1996-4 Class M1, 7.75% 6/15/27 | | 1,788,179 | | 715,271 |
GSR Mortgage Loan Trust Series 2005-HE3 Class B3, 2.8894% 6/25/35 (f)(h) | | 1,259,000 | | 45,308 |
Guggenheim Structured Real Estate Funding Ltd./Guggenheim Structured Real Estate Funding LLC Series 2005-2A: | | | | |
Class D, 1.9394% 8/26/30 (e)(f) | | 735,000 | | 132,300 |
Class E, 2.3894% 8/26/30 (e)(f) | | 1,420,000 | | 170,400 |
Lehman ABS Manufactured Housing Contract Trust
Series 2001-B Class M2, 7.17% 3/15/28 | | 1,500,000 | | 168,162 |
Merit Securities Corp. Series 13 Class M1, 8.63% 12/28/33 | | 1,923,000 | | 769,200 |
N-Star Real Estate CDO Ltd. Series 1A Class C1B, 7.696% 8/28/38 (e) | | 883,000 | | 264,900 |
Park Place Securities, Inc. Series 2004-WHQ2
Class M10, 2.8894% 2/25/35 (e)(f) | | 227,251 | | 913 |
Prima Capital CDO Ltd./Prima Capital CDO Corp. Series 2005-1A Class A2, 4.646% 7/24/39 (e) | | 939,099 | | 563,460 |
Taberna Preferred Funding III Ltd. Series 2005-3A
Class D, 5.5088% 2/5/36 (e)(f) | | 3,144,729 | | 31,447 |
Wrightwood Capital Real Estate CDO Ltd.
Series 2005-1A Class F, 4.1225% 11/21/40 (e)(f) | | 250,000 | | 7,500 |
TOTAL ASSET-BACKED SECURITIES (Cost $29,010,391) | 12,346,462 |
Collateralized Mortgage Obligations - 2.8% |
| Principal Amount (d) | | Value |
Private Sponsor - 2.7% |
Countrywide Home Loans, Inc.: | | | | |
Series 2002-38 Class B3, 5% 2/25/18 (e) | | $ 161,830 | | $ 40,263 |
Series 2002-R2 Class 2B3, 5.7794% 7/25/33 (e)(f) | | 251,413 | | 62,065 |
Series 2003-40 Class B3, 4.5% 10/25/18 (e) | | 211,466 | | 53,162 |
Series 2003-R2 Class B3, 5.5% 5/25/43 (e) | | 541,194 | | 38,860 |
Series 2003-R3: | | | | |
Class B2, 5.5% 11/25/33 (e) | | 1,725,890 | | 362,832 |
Class B3, 5.5% 11/25/33 (e) | | 516,787 | | 82,715 |
Series 2004-R1 Class 1B3, 5.5% 11/25/34 (e)(f) | | 533,769 | | 54,343 |
Diversified REIT Trust: | | | | |
Series 1999-1A Class H, 6.78% 3/18/11 (e)(f) | | 1,785,000 | | 1,573,136 |
Series 2000-1A: | | | | |
Class F, 6.971% 3/8/10 (e) | | 1,512,000 | | 680,400 |
Class G, 6.971% 3/8/10 (e) | | 1,720,000 | | 774,000 |
Merrill Lynch Floating Trust floater Series 2006-1
Class TM, 0.8331% 6/15/22 (e)(f) | | 2,449,089 | | 1,506,190 |
Merrill Lynch Mortgage Trust Series 2002-MW1 Class E, 6.219% 7/12/34 (e) | | 1,465,000 | | 907,213 |
RESI Finance LP/RESI Finance DE Corp. floater: | | | | |
Series 2003-B Class B9, 12.3363% 7/10/35 (e)(f) | | 810,849 | | 356,125 |
Series 2004-C Class B5, 1.7363% 9/10/36 (e)(f) | | 373,265 | | 81,857 |
Series 2005-A Class B6, 2.3863% 3/10/37 (e)(f) | | 1,878,956 | | 221,529 |
Series 2005-B Class B6, 1.9863% 6/10/37 (e)(f) | | 927,442 | | 82,821 |
Series 2005-D Class B6, 2.5831% 12/15/37 (e)(f) | | 467,962 | | 33,038 |
Series 2006-B Class B6, 2.0331% 7/15/38 (e)(f) | | 952,698 | | 45,063 |
Residential Funding Mortgage Securities I, Inc.
Series 2002-S20 Class M3, 5.25% 12/25/17 | | 66,041 | | 39,625 |
Residential Funding Securities Corp. Series 2002-RM1 Class BI1, 5.5% 12/25/17 (e) | | 138,629 | | 28,586 |
RESIX Finance Ltd. floater: | | | | |
Series 2003-D Class B8, 6.8863% 12/10/35 (e)(f) | | 671,859 | | 188,053 |
Series 2004-A Class B7, 4.6363% 2/10/36 (e)(f) | | 644,331 | | 149,936 |
Series 2004-B Class B7, 4.3863% 2/10/36 (e)(f) | | 773,857 | | 134,729 |
Series 2005-C Class B7, 3.4863% 9/10/37 (e)(f) | | 1,899,823 | | 149,136 |
Series 2006-B Class B7, 4.1831% 7/15/38 (e)(f) | | 952,698 | | 58,877 |
Series 2007-A Class BB, 3.6831% 2/15/39 (e)(f) | | 788,628 | | 26,182 |
TOTAL PRIVATE SPONSOR | | 7,730,736 |
Collateralized Mortgage Obligations - continued |
| Principal Amount (d) | | Value |
U.S. Government Agency - 0.1% |
Fannie Mae REMIC Trust: | | | | |
Series 2001-W3 subordinate REMIC pass thru certificates, Class B3, 7% 9/25/41 (h) | | $ 232,032 | | $ 78,684 |
Series 2002-W1 subordinate REMIC pass thru certificates, Class 3B3, 5.4794% 2/25/42 (e)(f) | | 140,004 | | 38,669 |
Series 2003-W1 subordinate REMIC pass thru certificates, Class B3, 5.75% 12/25/42 (h) | | 302,573 | | 68,257 |
Series 2003-W10 subordinate REMIC pass thru certificates, Class 2B3, 5.6228% 6/25/43 (e)(f) | | 180,180 | | 35,385 |
Series 2003-W4 subordinate REMIC pass thru certificates, Class 2B3, 5.8417% 10/25/42 (e)(f) | | 77,905 | | 15,421 |
TOTAL U.S. GOVERNMENT AGENCY | | 236,416 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $23,694,256) | 7,967,152 |
Commercial Mortgage Securities - 10.4% |
|
Asset Securitization Corp. Series 1997-D4 Class B2, 7.525% 4/14/29 | | 515,000 | | 431,554 |
Banc of America Large Loan, Inc. floater Series 2005-MIB1 Class K, 2.3331% 3/15/22 (e)(f) | | 700,000 | | 300,860 |
Credit Suisse First Boston Mortgage Securities Corp.: | | | | |
Series 1997-C2 Class F, 7.46% 1/17/35 (f) | | 2,000,000 | | 1,934,712 |
Series 2004-TF2A Class AX, 0% 11/15/19 (e)(f)(g) | | 4,742,624 | | 474 |
Crest Ltd. Series 2001-1A Class C, 9% 2/25/34 (e) | | 1,000,000 | | 846,407 |
Crown Castle Towers LLC/Crown Atlantic Holdings Sub LLC/Crown Communication, Inc. Series 2006-1A: | | | | |
Class D, 5.7724% 11/15/36 (e) | | 915,000 | | 754,875 |
Class E, 6.0652% 11/15/36 (e) | | 800,000 | | 636,000 |
Deutsche Mortgage & Asset Receiving Corp.
Series 1998-C1 Class J, 6.22% 6/15/31 | | 1,200,000 | | 480,000 |
First Chicago/Lennar Trust I Series 1997-CHL1 Class E, 8.0119% 4/29/39 (e)(f) | | 567,214 | | 567,214 |
G-Force LLC sequential payer Series 2005-RRA
Class A2, 4.83% 8/22/36 (e) | | 1,000,000 | | 764,503 |
GE Capital Commercial Mortgage Corp.: | | | | |
Series 2001-3 Class C, 6.51% 6/10/38 | | 820,000 | | 761,428 |
Series 2002-1A Class H, 7.1524% 12/10/35 (e)(f) | | 921,000 | | 695,931 |
Global Signal Trust II Series 2004-2A Class E, 5.587% 12/15/14 (e) | | 1,245,000 | | 1,201,425 |
Commercial Mortgage Securities - continued |
| Principal Amount (d) | | Value |
Global Signal Trust III Series 2006-1: | | | | |
Class E, 6.495% 2/15/36 (e) | | $ 570,000 | | $ 510,150 |
Class F, 7.036% 2/15/36 | | 1,015,000 | | 908,425 |
Global Towers Partners Acquisition Partners I LLC
Series 2007-1A Class G, 7.8737% 5/15/37 (e) | | 1,000,000 | | 745,000 |
GMAC Commercial Mortgage Securities, Inc.: | | | | |
Series 1997-C2: | | | | |
Class F, 6.75% 4/15/29 (f) | | 2,767,000 | | 2,385,229 |
Class G, 6.75% 4/15/29 (f) | | 1,000,000 | | 344,717 |
Series 1999-C3 Class J, 6.974% 8/15/36 (e) | | 1,500,000 | | 1,333,128 |
Series 2000-C1: | | | | |
Class H, 7% 3/15/33 (e) | | 950,000 | | 688,913 |
Class K, 7% 3/15/33 | | 1,100,000 | | 469,439 |
Greenwich Capital Commercial Funding Corp.
Series 2002-C1 Class H, 5.903% 1/11/35 (e) | | 750,000 | | 450,052 |
GS Mortgage Securities Corp. II floater Series 2007-EOP Class L, 3.1763% 3/1/20 (e)(f) | | 1,400,000 | | 840,000 |
JPMorgan Chase Commercial Mortgage Securities Corp.: | | | | |
Series 2001-A: | | | | |
Class G, 6% 10/15/32 (e)(f) | | 2,895,000 | | 723,750 |
Class X, 1.6482% 10/15/32 (e)(f)(g) | | 17,453,211 | | 186,749 |
Series 2002-CIB4 Class E, 6.7221% 5/12/34 (e)(f) | | 1,500,000 | | 1,341,721 |
JPMorgan Commercial Mortgage Finance Corp.: | | | | |
Series 1997-C5 Class F, 7.5605% 9/15/29 | | 2,400,000 | | 2,153,138 |
Series 1999-C7 Class F, 6% 10/15/35 (e) | | 51,075 | | 50,855 |
Series 1999-C8: | | | | |
Class G, 6% 7/15/31 (e) | | 1,385,000 | | 346,250 |
Class H, 6% 7/15/31 (e) | | 2,638,000 | | 316,560 |
Merrill Lynch Financial Asset, Inc. Series 2005-CA16: | | | | |
Class F, 4.384% 7/12/15 | CAD | 710,000 | | 309,741 |
Class G, 4.384% 7/12/15 | CAD | 355,000 | | 147,604 |
Class H, 4.384% 7/12/15 | CAD | 236,000 | | 93,570 |
Class J, 4.384% 7/12/15 | CAD | 355,000 | | 134,306 |
Class K, 4.384% 7/12/15 | CAD | 355,000 | | 128,224 |
Class L, 4.384% 7/12/15 | CAD | 236,000 | | 81,425 |
Class M, 4.384% 7/12/15 | CAD | 995,000 | | 224,251 |
Merrill Lynch Mortgage Investors Trust Series 1999-C1 Class G, 6.71% 11/15/31 (e) | | 3,359,000 | | 450,778 |
Mezz Capital Commercial Mortgage Trust Series 2004-C1: | | | | |
Class D, 6.988% 9/15/13 | | 750,000 | | 623,948 |
Class E, 7.983% 10/15/13 | | 1,453,000 | | 1,190,385 |
Commercial Mortgage Securities - continued |
| Principal Amount (d) | | Value |
Mezz Capital Commercial Mortgage Trust Series 2004-C1: - continued | | | | |
Class IO, 7.7947% 1/15/18 (f)(g) | | $ 6,667,362 | | $ 892,158 |
Morgan Stanley Capital I Trust Series 2005-HQ7
Class E, 5.2078% 11/14/42 (f) | | 750,000 | | 161,415 |
SBA CMBS Trust Series 2006-1A Class J, 7.825% 11/15/36 (e) | | 1,000,000 | | 745,000 |
TimberStar Trust I Series 2006-1 Class F, 7.5296% 10/15/36 (e) | | 2,000,000 | | 700,000 |
UBS Commercial Mortgage Trust Series 2007-FL1
Class F, 0.9081% 9/15/09 (e)(f) | | 1,200,000 | | 600,000 |
Wachovia Ltd./Wachovia LLC Series 2006-1 Class 1ML, 6.9663% 9/25/26 (e)(f) | | 2,000,000 | | 120,000 |
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $48,018,931) | 29,772,264 |
Floating Rate Loans - 1.0% |
|
CONSUMER DISCRETIONARY - 0.6% |
Specialty Retail - 0.6% |
The Pep Boys - Manny, Moe & Jack term loan 4.18% 10/27/13 (f) | | 28,460 | | 17,361 |
Toys 'R' US, Inc. term loan 3.4475% 12/8/09 (f) | | 4,100,000 | | 1,763,000 |
| | 1,780,361 |
FINANCIALS - 0.4% |
Diversified Financial Services - 0.1% |
LandSource Holding Co. LLC term loan 8.25% 5/31/09 (f) | | 1,843,343 | | 313,368 |
Real Estate Management & Development - 0.3% |
MDS Realty Holdings LLC Tranche M3, term loan 5.3763% 1/1/09 (c)(f) | | 47,402 | | 23,701 |
Realogy Corp.: | | | | |
Credit-Linked Deposit 3.4363% 10/10/13 (f) | | 208,939 | | 123,274 |
Floating Rate Loans - continued |
| Principal Amount (d) | | Value |
FINANCIALS - continued |
Real Estate Management & Development - continued |
Realogy Corp.: - continued | | | | |
Tranche B, term loan 5.7063% 10/10/13 (f) | | $ 776,061 | | $ 457,876 |
Tishman Speyer Properties term loan 2.09% 12/27/12 (f) | | 210,000 | | 73,500 |
| | 678,351 |
TOTAL FINANCIALS | | 991,719 |
TOTAL FLOATING RATE LOANS (Cost $7,201,025) | 2,772,080 |
Preferred Securities - 0.1% |
| | | |
FINANCIALS - 0.1% |
Diversified Financial Services - 0.1% |
Cairn High Grade ABS CDO PLC Series 2006-2A Class SUB, 1/13/47 (e) | 1,000,000 | | 690 |
Crest Clarendon Street 2002-1 Ltd. Series 2002-1A Class PS, 12/28/35 (e) | 500,000 | | 63,581 |
Crest Dartmouth Street 2003 1 Ltd. Series 2003-1A Class PS, 6/28/38 (e) | 590,000 | | 116,529 |
Harp High Grade CDO I Ltd. Series 2006-1, 7/8/46 (e) | 810,000 | | 1 |
Ipswich Street CDO Series 2006-1, 6/27/46 (c)(e) | 1,350,000 | | 0 |
Kent Funding III Ltd. 11/5/47 (e) | 1,650,000 | | 0 |
TOTAL PREFERRED SECURITIES (Cost $5,660,645) | 180,801 |
Money Market Funds - 4.1% |
| Shares | | |
Fidelity Cash Central Fund, 0.78% (b)
(Cost $11,605,599) | 11,605,599 | | 11,605,599 |
TOTAL INVESTMENT PORTFOLIO - 98.6% (Cost $451,836,126) | | 281,679,711 |
NET OTHER ASSETS - 1.4% | | 3,868,584 |
NET ASSETS - 100% | $ 285,548,295 |
Currency Abbreviation |
CAD | - | Canadian dollar |
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) Non-income producing - Issuer is in default. |
(d) Principal amount is stated in United States dollars unless otherwise noted. |
(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 $56,008,358 or 19.6% of net assets. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period. |
(h) 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 $192,249 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Fannie Mae REMIC Trust: Series 2001-W3 subordinate REMIC pass thru certificates,
Class B3, 7% 9/25/41 | 5/21/03 | $ 194,591 |
Series 2003-W1 subordinate REMIC pass thru certificates,
Class B3, 5.75% 12/25/42 | 3/25/03 | $ 221,241 |
GSR Mortgage Loan Trust
Series 2005-HE3 Class B3, 2.8894% 6/25/35 | 6/3/05 | $ 1,110,697 |
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 | $ 141,386 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 281,679,711 | $ 89,704,937 | $ 172,079,491 | $ 19,895,283 |
The following is a reconciliation of assets for which Level 3 inputs were used in determining value: |
| Investments in Securities |
Beginning Balance | $ 32,391,074 |
Total Realized Gain (Loss) | 5,237 |
Total Unrealized Gain (Loss) | (24,333,380) |
Cost of Purchases | 42,613 |
Proceeds of Sales | (371,353) |
Amortization/Accretion | (1,439,957) |
Transfer in/out of Level 3 | 13,601,049 |
Ending Balance | $ 19,895,283 |
The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations | 0.1% |
AAA,AA,A | 5.1% |
BBB | 27.5% |
BB | 15.4% |
B | 3.9% |
CCC,CC,C | 3.8% |
D | 0.2% |
Not Rated | 9.1% |
Equities | 29.4% |
Short-Term Investments and Net Other Assets | 5.5% |
| 100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. |
Income Tax Information |
At July 31, 2008, the fund had a capital loss carryforward of approximately $1,722,470 all of which will expire on July 31, 2016. |
The fund intends to elect to defer to its fiscal year ending July 31, 2009 approximately $8,001,905 of losses recognized during the period November 1, 2007 to July 31, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 |
| | |
Assets | | |
Investment in securities, at value -
See accompanying schedule: Unaffiliated issuers (cost $440,230,527) | $ 270,074,112 | |
Fidelity Central Funds (cost $11,605,599) | 11,605,599 | |
Total Investments (cost $451,836,126) | | $ 281,679,711 |
Receivable for investments sold | | 525,550 |
Receivable for fund shares sold | | 742,786 |
Dividends receivable | | 569,167 |
Interest receivable | | 3,742,406 |
Distributions receivable from Fidelity Central Funds | | 10,191 |
Prepaid expenses | | 3,488 |
Other receivables | | 92 |
Total assets | | 287,273,391 |
| | |
Liabilities | | |
Payable to custodian bank | $ 26,660 | |
Payable for investments purchased | 1,220,853 | |
Payable for fund shares redeemed | 209,772 | |
Accrued management fee | 132,506 | |
Other affiliated payables | 78,484 | |
Other payables and accrued expenses | 56,821 | |
Total liabilities | | 1,725,096 |
| | |
Net Assets | | $ 285,548,295 |
Net Assets consist of: | | |
Paid in capital | | $ 477,617,956 |
Undistributed net investment income | | 205,636 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (22,118,762) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (170,156,535) |
Net Assets, for 42,599,010 shares outstanding | | $ 285,548,295 |
Net Asset Value, offering price and redemption price per share ($285,548,295 ÷ 42,599,010 shares) | | $ 6.70 |
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, 2009 |
| | |
Investment Income | | |
Dividends | | $ 3,797,052 |
Interest | | 8,396,413 |
Income from Fidelity Central Funds | | 141,386 |
Total income | | 12,334,851 |
| | |
Expenses | | |
Management fee | $ 903,903 | |
Transfer agent fees | 472,533 | |
Accounting fees and expenses | 78,874 | |
Custodian fees and expenses | 5,204 | |
Independent trustees' compensation | 944 | |
Registration fees | 27,985 | |
Audit | 53,903 | |
Legal | 3,239 | |
Miscellaneous | 7,864 | |
Total expenses before reductions | 1,554,449 | |
Expense reductions | (4,927) | 1,549,522 |
Net investment income (loss) | | 10,785,329 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (12,138,798) | |
Foreign currency transactions | (2,846) | |
Total net realized gain (loss) | | (12,141,644) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (93,984,998) | |
Assets and liabilities in foreign currencies | 8 | |
Total change in net unrealized appreciation (depreciation) | | (93,984,990) |
Net gain (loss) | | (106,126,634) |
Net increase (decrease) in net assets resulting from operations | | $ (95,341,305) |
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,
2009 | Year ended
July 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 10,785,329 | $ 24,866,061 |
Net realized gain (loss) | (12,141,644) | (9,815,357) |
Change in net unrealized appreciation (depreciation) | (93,984,990) | (53,367,340) |
Net increase (decrease) in net assets resulting from operations | (95,341,305) | (38,316,636) |
Distributions to shareholders from net investment income | (15,792,735) | (27,623,042) |
Distributions to shareholders from net realized gain | - | (10,229,882) |
Total distributions | (15,792,735) | (37,852,924) |
Share transactions
Proceeds from sales of shares | 97,228,705 | 160,139,773 |
Reinvestment of distributions | 14,358,477 | 33,576,156 |
Cost of shares redeemed | (108,215,596) | (240,856,702) |
Net increase (decrease) in net assets resulting from share transactions | 3,371,586 | (47,140,773) |
Redemption fees | 163,574 | 189,883 |
Total increase (decrease) in net assets | (107,598,880) | (123,120,450) |
| | |
Net Assets | | |
Beginning of period | 393,147,175 | 516,267,625 |
End of period (including undistributed net investment income of $205,636 and undistributed net investment income of $5,213,042, respectively) | $ 285,548,295 | $ 393,147,175 |
Other Information Shares | | |
Sold | 12,930,087 | 15,810,826 |
Issued in reinvestment of distributions | 1,928,562 | 3,247,810 |
Redeemed | (13,941,108) | (23,376,733) |
Net increase (decrease) | 917,541 | (4,318,097) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
| Six months ended
January 31, | Years ended July 31, |
| 2009 | 2008 | 2007 | 2006 | 2005 | 2004 |
Selected Per-Share Data | | | | | |
Net asset value, beginning of period | $ 9.43 | $ 11.22 | $ 11.78 | $ 12.17 | $ 11.49 | $ 10.91 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .26 | .59 | .63 | .66 | .60 | .59 |
Net realized and unrealized gain (loss) | (2.60) | (1.48) | (.37) | (.11) | .83 | .60 |
Total from investment operations | (2.34) | (.89) | .26 | .55 | 1.43 | 1.19 |
Distributions from net investment income | (.39) | (.66) | (.58) | (.67) | (.57) | (.55) |
Distributions from net realized gain | - | (.24) | (.24) | (.27) | (.18) | (.07) |
Total distributions | (.39) | (.90) | (.82) | (.94) | (.75) | (.62) |
Redemption fees added to paid in capitalD | -H | -H | -H | -H | -H | .01 |
Net asset value, end of period | $ 6.70 | $ 9.43 | $ 11.22 | $ 11.78 | $ 12.17 | $ 11.49 |
Total ReturnB, C | (25.17)% | (8.43)% | 2.00% | 4.82% | 12.90% | 11.31% |
Ratios to Average Net AssetsE, G | | | | | |
Expenses before reductions | .97%A | .94% | .88% | .85% | .85% | .85% |
Expenses net of fee waivers, if any | .97%A | .94% | .88% | .85% | .85% | .85% |
Expenses net of all reductions | .97%A | .94% | .88% | .85% | .85% | .85% |
Net investment income (loss) | 6.72%A | 5.77% | 5.30% | 5.61% | 5.13% | 5.25% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 285,548 | $ 393,147 | $ 516,268 | $ 521,265 | $ 667,403 | $ 422,551 |
Portfolio turnover rateF | 30%A | 32% | 45% | 27% | 30% | 61% |
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 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.
H 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, 2009
1. Organization.
Fidelity Real Estate Income 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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Certain of the Fund's securities are valued at period end by a single source or dealer. Investments in open-end
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.
Semiannual Report
3. Significant Accounting Policies - continued
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. 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. The Fund follows the provisions of Emerging Issues Task Force Issue No. 99-20 (EITF 99-20), "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets" for certain lower credit quality securitized assets that have contractual cash flows (for example, asset backed securities, collateralized mortgage obligations and commercial mortgage-backed securities). Under EITF 99-20, if there is a change in the estimated cash flows for any of these securities, based on an evaluation of current information, then the estimated yield is adjusted on a prospective basis over the remaining life of the security. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a
Semiannual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
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. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. 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, passive foreign investment companies (PFIC), market discount, partnerships and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 5,593,512 |
Unrealized depreciation | (177,295,811) |
Net unrealized appreciation (depreciation) | $ (171,702,299) |
Cost for federal income tax purposes | $ 453,382,010 |
Semiannual Report
3. Significant Accounting Policies - continued
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to .75% 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.
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.
Loans and Other Direct Debt Instruments. The Fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments, including revolving credit facilities, that obligate the Fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $55,349,494 and $45,713,515, respectively.
Semiannual Report
Notes to Financial Statements - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
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 .29% of average net assets.
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
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 $2,432 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 $408 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Expense Reductions.
Through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expense by $4,927.
Semiannual Report
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
To the Trustees of Fidelity Securities Fund and Shareholders of Fidelity Real Estate Income Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Real Estate Income Fund (the Fund), a fund of Fidelity Securities Fund, including the schedule of investments, as of January 31, 2009, and the related statement of operations for the six months then ended, the statement of changes in net assets for the six months ended January 31, 2009 and for the year ended July 31, 2008, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of January 31, 2009, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Real Estate Income Fund as of January 31, 2009, the results of its operations for the six months then ended, the changes in its net assets for the six months ended January 31, 2009 and for the year ended July 31, 2008, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 30, 2009
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
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
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
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
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
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) 1-800-544-5555
Automated line for quickest service
REI-USAN-0309
1.789734.105
Fidelity®
Small Cap Value
Fund
Semiannual Report
January 31, 2009
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | 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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
| Annualized
Expense
Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008 to
January 31, 2009 |
Class A | 1.37% | | | |
Actual | | $ 1,000.00 | $ 704.60 | $ 5.89 |
HypotheticalA | | $ 1,000.00 | $ 1,018.30 | $ 6.97 |
Class T | 1.63% | | | |
Actual | | $ 1,000.00 | $ 703.80 | $ 7.00 |
HypotheticalA | | $ 1,000.00 | $ 1,016.99 | $ 8.29 |
Class B | 2.12% | | | |
Actual | | $ 1,000.00 | $ 701.70 | $ 9.09 |
HypotheticalA | | $ 1,000.00 | $ 1,014.52 | $ 10.76 |
Class C | 2.12% | | | |
Actual | | $ 1,000.00 | $ 701.50 | $ 9.09 |
HypotheticalA | | $ 1,000.00 | $ 1,014.52 | $ 10.76 |
Small Cap Value | 1.11% | | | |
Actual | | $ 1,000.00 | $ 704.80 | $ 4.77 |
HypotheticalA | | $ 1,000.00 | $ 1,019.61 | $ 5.65 |
Institutional Class | 1.11% | | | |
Actual | | $ 1,000.00 | $ 705.20 | $ 4.77 |
HypotheticalA | | $ 1,000.00 | $ 1,019.61 | $ 5.65 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Aspen Insurance Holdings Ltd. | 2.9 | 2.6 |
Carpenter Technology Corp. | 2.9 | 0.0 |
W.R. Berkley Corp. | 2.7 | 0.0 |
United Stationers, Inc. | 2.7 | 2.4 |
Reinsurance Group of America, Inc. | 2.5 | 0.0 |
HNI Corp. | 2.5 | 2.8 |
Washington Federal, Inc. | 2.4 | 1.3 |
Affiliated Managers Group, Inc. | 2.4 | 0.0 |
IPC Holdings Ltd. | 2.3 | 2.3 |
MEDNAX, Inc. | 2.2 | 2.4 |
| 25.5 | |
Top Five Market Sectors as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Financials | 37.5 | 32.7 |
Information Technology | 13.5 | 11.8 |
Consumer Discretionary | 12.7 | 14.0 |
Industrials | 10.6 | 12.0 |
Health Care | 6.9 | 5.3 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009 * | As of July 31, 2008 ** |
| Stocks 94.4% | | | Stocks 98.0% | |
 | Convertible
Securities 4.7% | | | Convertible
Securities 0.0% | |
| Short-Term
Investments and
Net Other Assets 0.9% | | | Short-Term
Investments and
Net Other Assets 2.0% | |
* Foreign investments | 12.1% | | ** Foreign investments | 10.9% | |
Semiannual Report
Investments January 31, 2009 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 92.8% |
| Shares | | Value |
CONSUMER DISCRETIONARY - 10.6% |
Diversified Consumer Services - 0.9% |
Regis Corp. | 837,340 | | $ 9,420,075 |
Household Durables - 3.8% |
Centex Corp. (d) | 658,940 | | 5,607,579 |
Ethan Allen Interiors, Inc. | 279,513 | | 3,183,653 |
M.D.C. Holdings, Inc. | 225,000 | | 6,894,000 |
Meritage Homes Corp. (a)(d) | 1,412,593 | | 15,566,775 |
Ryland Group, Inc. (d) | 427,900 | | 6,675,240 |
| | 37,927,247 |
Specialty Retail - 5.0% |
Asbury Automotive Group, Inc. | 1,145,215 | | 4,099,870 |
Penske Auto Group, Inc. (d) | 2,337,760 | | 17,346,179 |
The Men's Wearhouse, Inc. (d) | 1,069,641 | | 12,461,318 |
Tsutsumi Jewelry Co. Ltd. | 760,200 | | 16,718,019 |
| | 50,625,386 |
Textiles, Apparel & Luxury Goods - 0.9% |
Iconix Brand Group, Inc. (a) | 1,050,087 | | 8,684,219 |
TOTAL CONSUMER DISCRETIONARY | | 106,656,927 |
CONSUMER STAPLES - 2.5% |
Food & Staples Retailing - 2.5% |
Casey's General Stores, Inc. | 750,000 | | 15,937,500 |
Ingles Markets, Inc. Class A | 625,487 | | 8,919,445 |
| | 24,856,945 |
ENERGY - 4.0% |
Energy Equipment & Services - 1.2% |
Superior Energy Services, Inc. (a) | 776,700 | | 12,100,986 |
Oil, Gas & Consumable Fuels - 2.8% |
Encore Acquisition Co. (a)(d) | 603,609 | | 16,406,093 |
Mariner Energy, Inc. (a) | 1,166,700 | | 11,550,330 |
| | 27,956,423 |
TOTAL ENERGY | | 40,057,409 |
FINANCIALS - 33.7% |
Capital Markets - 7.5% |
Affiliated Managers Group, Inc. (a) | 600,000 | | 24,114,000 |
Cohen & Steers, Inc. (d) | 1,100,000 | | 11,880,000 |
optionsXpress Holdings, Inc. | 974,510 | | 10,612,414 |
Common Stocks - continued |
| Shares | | Value |
FINANCIALS - continued |
Capital Markets - continued |
Sparx Group Co. Ltd. (d) | 22,235 | | $ 2,524,118 |
TradeStation Group, Inc. (a) | 2,092,291 | | 11,528,523 |
Waddell & Reed Financial, Inc. Class A | 1,050,000 | | 14,826,000 |
| | 75,485,055 |
Commercial Banks - 4.0% |
Associated Banc-Corp. (d) | 1,189,583 | | 18,616,974 |
Boston Private Financial Holdings, Inc. (d) | 1,465,680 | | 6,903,353 |
City National Corp. (d) | 414,900 | | 14,359,689 |
| | 39,880,016 |
Insurance - 12.4% |
Aspen Insurance Holdings Ltd. | 1,300,200 | | 28,734,418 |
IPC Holdings Ltd. | 898,740 | | 23,061,668 |
Max Capital Group Ltd. | 1,169,111 | | 19,886,578 |
Reinsurance Group of America, Inc. | 703,801 | | 25,076,430 |
W.R. Berkley Corp. | 1,025,000 | | 27,142,000 |
| | 123,901,094 |
Real Estate Investment Trusts - 5.0% |
CapitalSource, Inc. (d) | 3,947,200 | | 14,367,808 |
Chimera Investment Corp. | 4,748,323 | | 15,669,466 |
Highwoods Properties, Inc. (SBI) | 491,230 | | 11,082,149 |
National Retail Properties, Inc. | 600,000 | | 8,658,000 |
| | 49,777,423 |
Real Estate Management & Development - 1.8% |
Jones Lang LaSalle, Inc. | 776,000 | | 18,321,360 |
Thrifts & Mortgage Finance - 3.0% |
Astoria Financial Corp. | 600,762 | | 5,454,919 |
Washington Federal, Inc. (d) | 1,981,840 | | 24,336,995 |
| | 29,791,914 |
TOTAL FINANCIALS | | 337,156,862 |
HEALTH CARE - 6.9% |
Health Care Equipment & Supplies - 1.4% |
Abaxis, Inc. (a)(d) | 894,400 | | 14,149,408 |
Health Care Providers & Services - 4.1% |
MEDNAX, Inc. (a) | 666,500 | | 22,374,405 |
VCA Antech, Inc. (a) | 1,000,000 | | 18,820,000 |
| | 41,194,405 |
Common Stocks - continued |
| Shares | | Value |
HEALTH CARE - continued |
Pharmaceuticals - 1.4% |
Perrigo Co. | 486,200 | | $ 14,269,970 |
TOTAL HEALTH CARE | | 69,613,783 |
INDUSTRIALS - 10.2% |
Building Products - 1.7% |
NCI Building Systems, Inc. (a)(d) | 649,320 | | 7,525,619 |
Simpson Manufacturing Co. Ltd. (d) | 475,000 | | 9,533,250 |
| | 17,058,869 |
Commercial Services & Supplies - 5.4% |
ACCO Brands Corp. (a) | 1,250,923 | | 2,401,772 |
HNI Corp. (d) | 1,895,771 | | 25,043,135 |
United Stationers, Inc. (a) | 950,000 | | 26,609,500 |
| | 54,054,407 |
Construction & Engineering - 1.8% |
URS Corp. (a) | 532,376 | | 18,127,403 |
Machinery - 1.3% |
Graco, Inc. | 600,000 | | 12,762,000 |
TOTAL INDUSTRIALS | | 102,002,679 |
INFORMATION TECHNOLOGY - 13.5% |
Communications Equipment - 2.1% |
Polycom, Inc. (a) | 400,000 | | 5,620,000 |
ViaSat, Inc. (a) | 679,472 | | 15,057,100 |
| | 20,677,100 |
Electronic Equipment & Components - 4.5% |
Ingram Micro, Inc. Class A (a) | 1,603,100 | | 19,670,037 |
Macnica, Inc. | 677,400 | | 9,048,067 |
Ryoyo Electro Corp. | 1,272,700 | | 10,320,786 |
SYNNEX Corp. (a) | 389,898 | | 5,984,934 |
| | 45,023,824 |
Internet Software & Services - 4.0% |
DealerTrack Holdings, Inc. (a) | 1,949,434 | | 22,204,053 |
j2 Global Communications, Inc. (a) | 563,149 | | 11,026,457 |
LoopNet, Inc. (a) | 1,094,182 | | 7,112,183 |
| | 40,342,693 |
IT Services - 0.6% |
Telvent GIT SA | 441,358 | | 6,408,518 |
Common Stocks - continued |
| Shares | | Value |
INFORMATION TECHNOLOGY - continued |
Semiconductors & Semiconductor Equipment - 1.7% |
FormFactor, Inc. (a) | 764,157 | | $ 11,890,283 |
Miraial Co. Ltd. (d)(e) | 554,400 | | 5,337,284 |
| | 17,227,567 |
Software - 0.6% |
MICROS Systems, Inc. (a) | 400,000 | | 5,760,000 |
TOTAL INFORMATION TECHNOLOGY | | 135,439,702 |
MATERIALS - 4.6% |
Chemicals - 1.7% |
Spartech Corp. (e) | 1,583,102 | | 5,018,433 |
Valspar Corp. | 710,000 | | 12,318,500 |
| | 17,336,933 |
Metals & Mining - 2.9% |
Carpenter Technology Corp. | 1,725,000 | | 28,462,500 |
TOTAL MATERIALS | | 45,799,433 |
TELECOMMUNICATION SERVICES - 1.8% |
Diversified Telecommunication Services - 1.8% |
Cogent Communications Group, Inc. (a)(d)(e) | 2,750,000 | | 18,287,500 |
UTILITIES - 5.0% |
Electric Utilities - 3.1% |
Allete, Inc. (d) | 277,250 | | 8,622,475 |
Westar Energy, Inc. | 1,100,000 | | 22,088,000 |
| | 30,710,475 |
Gas Utilities - 1.9% |
Southwest Gas Corp. | 760,989 | | 19,603,077 |
TOTAL UTILITIES | | 50,313,552 |
TOTAL COMMON STOCKS (Cost $1,278,818,193) | 930,184,792 |
Nonconvertible Preferred Stocks - 1.6% |
| | | |
CONSUMER DISCRETIONARY - 0.5% |
Household Durables - 0.5% |
M/I Homes, Inc. Series A, 9.75% | 708,100 | | 4,963,781 |
Nonconvertible Preferred Stocks - continued |
| Shares | | Value |
FINANCIALS - 1.1% |
Real Estate Investment Trusts - 0.7% |
Developers Diversified Realty Corp.: | | | |
(depositary shares) Series H, 7.375% | 565,000 | | $ 3,700,750 |
Series I, 7.50% | 430,155 | | 2,903,546 |
| | 6,604,296 |
Thrifts & Mortgage Finance - 0.4% |
Fannie Mae Series S, 8.25% | 3,702,100 | | 4,072,310 |
TOTAL FINANCIALS | | 10,676,606 |
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $28,794,938) | 15,640,387 |
Convertible Bonds - 4.7% |
| Principal Amount | | |
CONSUMER DISCRETIONARY - 1.6% |
Specialty Retail - 1.6% |
United Auto Group, Inc. 3.5% 4/1/26 | | $ 24,000,000 | | 15,418,320 |
FINANCIALS - 2.7% |
Real Estate Investment Trusts - 2.7% |
SL Green Realty Corp. 3% 3/30/27 (f) | | 45,000,000 | | 27,296,932 |
INDUSTRIALS - 0.4% |
Building Products - 0.4% |
NCI Building Systems, Inc. 2.125% 11/15/24 | | 5,000,000 | | 3,976,000 |
TOTAL CONVERTIBLE BONDS (Cost $40,324,451) | 46,691,252 |
Money Market Funds - 9.5% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.78% (b) | 13,832,798 | | $ 13,832,798 |
Fidelity Securities Lending Cash Central Fund, 0.71% (b)(c) | 81,885,586 | | 81,885,586 |
TOTAL MONEY MARKET FUNDS (Cost $95,718,384) | 95,718,384 |
TOTAL INVESTMENT PORTFOLIO - 108.6% (Cost $1,443,655,966) | | 1,088,234,815 |
NET OTHER ASSETS - (8.6)% | | (86,483,004) |
NET ASSETS - 100% | $ 1,001,751,811 |
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 $27,296,932 or 2.7% 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 | $ 159,962 |
Fidelity Securities Lending Cash Central Fund | 1,228,744 |
Total | $ 1,388,706 |
Other Affiliated Issuers |
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Cogent Communications Group, Inc. | $ - | $ 18,402,564 | $ - | $ - | $ 18,287,500 |
Miraial Co. Ltd. | - | 7,176,911 | - | 173,717 | 5,337,284 |
Spartech Corp. | 11,202,911 | 4,588,500 | - | 158,310 | 5,018,433 |
The Pantry, Inc. | 18,783,837 | - | 21,698,273 | - | - |
Zoran Corp. | 13,344,836 | 9,473,071 | 17,237,167 | - | - |
Total | $ 43,331,584 | $ 39,641,046 | $ 38,935,440 | $ 332,027 | $ 28,643,217 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 1,088,234,815 | $ 997,595,289 | $ 90,639,526 | $ - |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited) |
United States of America | 87.9% |
Bermuda | 7.2% |
Japan | 4.3% |
Others (individually less than 1%) | 0.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $77,882,041) - See accompanying schedule: Unaffiliated issuers (cost $1,306,262,991) | $ 963,873,214 | |
Fidelity Central Funds (cost $95,718,384) | 95,718,384 | |
Other affiliated issuers (cost $41,674,591) | 28,643,217 | |
Total Investments (cost $1,443,655,966) | | $ 1,088,234,815 |
Receivable for investments sold | | 2,356,054 |
Receivable for fund shares sold | | 1,730,415 |
Dividends receivable | | 1,136,914 |
Interest receivable | | 750,149 |
Distributions receivable from Fidelity Central Funds | | 59,602 |
Prepaid expenses | | 11,664 |
Other receivables | | 2,016 |
Total assets | | 1,094,281,629 |
| | |
Liabilities | | |
Payable for investments purchased | $ 8,744,357 | |
Payable for fund shares redeemed | 814,939 | |
Accrued management fee | 731,383 | |
Distribution fees payable | 36,641 | |
Other affiliated payables | 282,652 | |
Other payables and accrued expenses | 34,260 | |
Collateral on securities loaned, at value | 81,885,586 | |
Total liabilities | | 92,529,818 |
| | |
Net Assets | | $ 1,001,751,811 |
Net Assets consist of: | | |
Paid in capital | | $ 1,506,055,851 |
Undistributed net investment income | | 453,962 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (149,332,992) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (355,425,010) |
Net Assets | | $ 1,001,751,811 |
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, 2009 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($37,482,352 ÷ 4,573,671 shares) | | $ 8.20 |
| | |
Maximum offering price per share (100/94.25 of $8.20) | | $ 8.70 |
Class T:
Net Asset Value and redemption price per share ($22,054,565 ÷ 2,707,357 shares) | | $ 8.15 |
| | |
Maximum offering price per share (100/96.50 of $8.15) | | $ 8.45 |
Class B:
Net Asset Value and offering price per share ($6,049,740 ÷ 752,381 shares)A | | $ 8.04 |
| | |
Class C:
Net Asset Value and offering price per share ($14,961,185 ÷ 1,860,012 shares)A | | $ 8.04 |
| | |
| | |
Small Cap Value:
Net Asset Value, offering price and redemption price per share ($914,449,231 ÷ 110,835,453 shares) | | $ 8.25 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($6,754,738 ÷ 817,698 shares) | | $ 8.26 |
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, 2009 (Unaudited) |
Investment Income | | |
Dividends (including $332,027 earned from other affiliated issuers) | | $ 12,220,295 |
Interest | | 685,100 |
Income from Fidelity Central Funds (including $1,228,744 from security lending) | | 1,388,706 |
Total income | | 14,294,101 |
| | |
Expenses | | |
Management fee
Basic fee | $ 4,070,191 | |
Performance adjustment | 284,045 | |
Transfer agent fees | 1,637,326 | |
Distribution fees | 256,557 | |
Accounting and security lending fees | 203,729 | |
Custodian fees and expenses | 19,321 | |
Independent trustees' compensation | 3,261 | |
Registration fees | 85,191 | |
Audit | 29,821 | |
Legal | 3,918 | |
Miscellaneous | 21,995 | |
Total expenses before reductions | 6,615,355 | |
Expense reductions | (10,548) | 6,604,807 |
Net investment income (loss) | | 7,689,294 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (137,956,834) | |
Other affiliated issuers | (7,964,745) | |
Foreign currency transactions | 7,846 | |
Total net realized gain (loss) | | (145,913,733) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (262,611,366) | |
Assets and liabilities in foreign currencies | (3,873) | |
Total change in net unrealized appreciation (depreciation) | | (262,615,239) |
Net gain (loss) | | (408,528,972) |
Net increase (decrease) in net assets resulting from operations | | $ (400,839,678) |
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, 2009
(Unaudited) | Year ended
July 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 7,689,294 | $ 2,118,900 |
Net realized gain (loss) | (145,913,733) | 26,624,935 |
Change in net unrealized appreciation (depreciation) | (262,615,239) | (226,824,054) |
Net increase (decrease) in net assets resulting from operations | (400,839,678) | (198,080,219) |
Distributions to shareholders from net investment income | (8,301,279) | - |
Distributions to shareholders from net realized gain | (12,095,172) | (53,456,977) |
Total distributions | (20,396,451) | (53,456,977) |
Share transactions - net increase (decrease) | 163,923,338 | 105,675,336 |
Redemption fees | 273,555 | 144,871 |
Total increase (decrease) in net assets | (257,039,236) | (145,716,989) |
| | |
Net Assets | | |
Beginning of period | 1,258,791,047 | 1,404,508,036 |
End of period (including undistributed net investment income of $453,962 and undistributed net investment income of $1,269,467, respectively) | $ 1,001,751,811 | $ 1,258,791,047 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.82 | $ 14.34 | $ 13.17 | $ 12.80 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .06 | (.01) | (.06) | (.03) | (.04) |
Net realized and unrealized gain (loss) | (3.51) | (1.98) | 1.90 | .74 | 2.84 |
Total from investment operations | (3.45) | (1.99) | 1.84 | .71 | 2.80 |
Distributions from net investment income | (.06) | - | - | - | (.01) |
Distributions from net realized gain | (.11) | (.53) | (.67) | (.35) | - |
Total distributions | (.17) | (.53) | (.67) | (.35) | (.01) |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.20 | $ 11.82 | $ 14.34 | $ 13.17 | $ 12.80 |
Total Return B, C, D | (29.54)% | (14.35)% | 14.59% | 5.72% | 28.06% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 1.37% A | 1.43% | 1.45% | 1.51% | 1.46% A |
Expenses net of fee waivers, if any | 1.37% A | 1.40% | 1.40% | 1.40% | 1.44% A |
Expenses net of all reductions | 1.37% A | 1.40% | 1.40% | 1.36% | 1.38% A |
Net investment income (loss) | 1.13% A | (.05)% | (.44)% | (.24)% | (.46)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 37,482 | $ 52,446 | $ 61,357 | $ 39,931 | $ 9,390 |
Portfolio turnover rate G | 79% A | 149% | 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 T
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.74 | $ 14.28 | $ 13.13 | $ 12.78 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | (.04) | (.10) | (.07) | (.06) |
Net realized and unrealized gain (loss) | (3.48) | (1.97) | 1.90 | .74 | 2.83 |
Total from investment operations | (3.44) | (2.01) | 1.80 | .67 | 2.77 |
Distributions from net investment income | (.04) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.65) | (.33) | - |
Total distributions | (.15) | (.53) | (.65) | (.33) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.15 | $ 11.74 | $ 14.28 | $ 13.13 | $ 12.78 |
Total Return B, C, D | (29.62)% | (14.58)% | 14.34% | 5.47% | 27.80% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 1.63% A | 1.68% | 1.66% | 1.67% | 1.72% A |
Expenses net of fee waivers, if any | 1.63% A | 1.65% | 1.65% | 1.65% | 1.68% A |
Expenses net of all reductions | 1.63% A | 1.65% | 1.65% | 1.61% | 1.62% A |
Net investment income (loss) | .88% A | (.30)% | (.69)% | (.49)% | (.70)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 22,055 | $ 32,091 | $ 51,518 | $ 45,460 | $ 12,725 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.73 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .02 | (.10) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (3.44) | (1.96) | 1.90 | .74 | 2.82 |
Total from investment operations | (3.42) | (2.06) | 1.73 | .61 | 2.72 |
Distributions from net investment income | (.03) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.61) | (.28) | - |
Total distributions | (.14) | (.53) | (.61) | (.28) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.04 | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.73 |
Total Return B, C, D | (29.83)% | (15.04)% | 13.78% | 4.97% | 27.30% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 2.12% A | 2.18% | 2.20% | 2.26% | 2.24% A |
Expenses net of fee waivers, if any | 2.12% A | 2.15% | 2.15% | 2.15% | 2.19% A |
Expenses net of all reductions | 2.12% A | 2.15% | 2.15% | 2.11% | 2.13% A |
Net investment income (loss) | .38% A | (.80)% | (1.19)% | (.99)% | (1.21)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 6,050 | $ 7,886 | $ 12,075 | $ 10,214 | $ 3,931 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.74 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .02 | (.10) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (3.44) | (1.96) | 1.90 | .74 | 2.83 |
Total from investment operations | (3.42) | (2.06) | 1.73 | .61 | 2.73 |
Distributions from net investment income | (.03) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.61) | (.29) | - |
Total distributions | (.14) | (.53) | (.61) | (.29) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.04 | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.74 |
Total Return B, C, D | (29.85)% | (15.04)% | 13.77% | 4.92% | 27.40% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 2.12% A | 2.18% | 2.20% | 2.22% | 2.17% A |
Expenses net of fee waivers, if any | 2.12% A | 2.15% | 2.15% | 2.15% | 2.17% A |
Expenses net of all reductions | 2.12% A | 2.15% | 2.15% | 2.11% | 2.11% A |
Net investment income (loss) | .39% A | (.80)% | (1.19)% | (.99)% | (1.19)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 14,961 | $ 20,924 | $ 34,155 | $ 26,791 | $ 11,732 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .07 | .03 | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (3.54) | (1.99) | 1.91 | .74 | 2.84 |
Total from investment operations | (3.47) | (1.96) | 1.89 | .75 | 2.83 |
Distributions from net investment income | (.08) | - | - | (.01) | (.01) |
Distributions from net realized gain | (.11) | (.56) | (.68) | (.36) | - |
Total distributions | (.19) | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.25 | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (29.52)% | (14.10)% | 14.96% | 6.07% | 28.36% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.11% A | 1.14% | 1.11% | 1.09% | 1.05% A |
Expenses net of fee waivers, if any | 1.11% A | 1.14% | 1.11% | 1.09% | 1.05% A |
Expenses net of all reductions | 1.11% A | 1.13% | 1.11% | 1.06% | .99% A |
Net investment income (loss) | 1.39% A | .22% | (.15)% | .06% | (.08)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 914,449 | $ 1,136,860 | $ 1,233,808 | $ 957,720 | $ 582,689 |
Portfolio turnover rate F | 79% A | 149% | 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
Financial Highlights - Institutional Class
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .07 | .03 | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (3.54) | (1.99) | 1.91 | .74 | 2.84 |
Total from investment operations | (3.47) | (1.96) | 1.89 | .75 | 2.83 |
Distributions from net investment income | (.07) | - | - | (.01) | (.01) |
Distributions from net realized gain | (.11) | (.56) | (.68) | (.36) | - |
Total distributions | (.18) | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.26 | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (29.48)% | (14.10)% | 14.99% | 6.08% | 28.36% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.11% A | 1.13% | 1.10% | 1.08% | 1.07% A |
Expenses net of fee waivers, if any | 1.11% A | 1.13% | 1.10% | 1.08% | 1.07% A |
Expenses net of all reductions | 1.11% A | 1.13% | 1.10% | 1.05% | 1.01% A |
Net investment income (loss) | 1.40% A | .22% | (.13)% | .08% | (.10)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 6,755 | $ 8,584 | $ 11,594 | $ 9,422 | $ 3,761 |
Portfolio turnover rate F | 79% A | 149% | 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, 2009 (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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as 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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments is included at the end of the Fund's Schedule of Investments.
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
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. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships and losses deferred due to wash sales.
Semiannual Report
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 | $ 33,516,483 |
Unrealized depreciation | (399,400,956) |
Net unrealized appreciation (depreciation) | $ (365,884,473) |
Cost for federal income tax purposes | $ 1,454,119,288 |
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.
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 $621,955,657 and $454,438,409, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .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 .76% 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
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 56,544 | $ 2,839 |
Class T | .25% | .25% | 74,124 | - |
Class B | .75% | .25% | 35,752 | 26,814 |
Class C | .75% | .25% | 90,137 | 13,761 |
| | | $ 256,557 | $ 43,414 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 11,616 |
Class T | 1,797 |
Class B* | 10,156 |
Class C* | 1,952 |
| $ 25,521 |
* 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 respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 66,705 | .29 |
Class T | 44,419 | .30 |
Class B | 10,628 | .30 |
Class C | 26,545 | .29 |
Small Cap Value | 1,478,269 | .29 |
Institutional Class | 10,760 | .29 |
| $ 1,637,326 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $29,455 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,399 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.
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 $1,146 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 $1,290. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Small Cap Value | $ 8,000 |
Institutional Class | 112 |
| $ 8,112 |
Semiannual Report
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Freedom 2020 Fund was the owner of record of approximately 11% of the total outstanding shares of the Fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 45% of the total outstanding shares of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
From net investment income | | |
Class A | $ 252,163 | $ - |
Class T | 111,704 | - |
Class B | 20,183 | - |
Class C | 45,207 | - |
Small Cap Value | 7,822,386 | - |
Institutional Class | 49,636 | - |
Total | $ 8,301,279 | $ - |
From net realized gain | | |
Class A | $ 496,926 | $ 2,334,219 |
Class T | 350,121 | 1,800,459 |
Class B | 77,045 | 442,697 |
Class C | 207,577 | 1,258,270 |
Small Cap Value | 10,883,170 | 47,176,109 |
Institutional Class | 80,333 | 445,223 |
Total | $ 12,095,172 | $ 53,456,977 |
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
January 31,
2009 | Year ended
July 31,
2008 | Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
Class A | | | | |
Shares sold | 903,214 | 1,801,333 | $ 9,194,039 | $ 23,728,165 |
Reinvestment of distributions | 64,970 | 158,451 | 694,478 | 2,181,126 |
Shares redeemed | (831,885) | (1,800,932) | (8,113,721) | (23,386,603) |
Net increase (decrease) | 136,299 | 158,852 | $ 1,774,796 | $ 2,522,688 |
Class T | | | | |
Shares sold | 992,143 | 618,951 | $ 11,245,724 | $ 8,024,654 |
Reinvestment of distributions | 40,640 | 127,052 | 449,360 | 1,740,319 |
Shares redeemed | (1,058,182) | (1,620,468) | (9,405,508) | (21,259,209) |
Net increase (decrease) | (25,399) | (874,465) | $ 2,289,576 | $ (11,494,236) |
Class B | | | | |
Shares sold | 202,741 | 128,063 | $ 2,143,065 | $ 1,643,352 |
Reinvestment of distributions | 7,760 | 29,083 | 85,947 | 395,378 |
Shares redeemed | (137,811) | (328,632) | (1,366,770) | (4,160,797) |
Net increase (decrease) | 72,690 | (171,486) | $ 862,242 | $ (2,122,067) |
Class C | | | | |
Shares sold | 433,283 | 565,275 | $ 4,341,014 | $ 7,245,287 |
Reinvestment of distributions | 19,410 | 82,093 | 217,621 | 1,115,865 |
Shares redeemed | (395,862) | (1,251,391) | (3,801,973) | (15,942,770) |
Net increase (decrease) | 56,831 | (604,023) | $ 756,662 | $ (7,581,618) |
Small Cap Value | | | | |
Shares sold | 23,366,344 | 33,217,718 | $ 233,643,406 | $ 432,952,106 |
Reinvestment of distributions | 1,741,583 | 3,344,768 | 18,397,974 | 46,241,130 |
Shares redeemed | (9,761,827) | (26,584,070) | (94,832,731) | (353,880,106) |
Net increase (decrease) | 15,346,100 | 9,978,416 | $ 157,208,649 | $ 125,313,130 |
Institutional Class | | | | |
Shares sold | 245,943 | 353,080 | $ 2,506,550 | $ 4,711,093 |
Reinvestment of distributions | 8,812 | 21,635 | 93,632 | 299,115 |
Shares redeemed | (157,658) | (457,781) | (1,568,769) | (5,972,769) |
Net increase (decrease) | 97,097 | (83,066) | $ 1,031,413 | $ (962,561) |
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
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
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
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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Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
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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 Management & Research
(Hong Kong) Limited
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(Japan) Inc.
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors (U.K.) Ltd.
General Distributor
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Boston, MA
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Automated line for quickest service
SCV-USAN-0309
1.803708.104
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Small Cap Value
Fund - Class A, Class T,
Class B and Class C
Semiannual Report
January 31, 2009
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 | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | 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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
| Annualized
Expense
Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008 to
January 31, 2009 |
Class A | 1.37% | | | |
Actual | | $ 1,000.00 | $ 704.60 | $ 5.89 |
HypotheticalA | | $ 1,000.00 | $ 1,018.30 | $ 6.97 |
Class T | 1.63% | | | |
Actual | | $ 1,000.00 | $ 703.80 | $ 7.00 |
HypotheticalA | | $ 1,000.00 | $ 1,016.99 | $ 8.29 |
Class B | 2.12% | | | |
Actual | | $ 1,000.00 | $ 701.70 | $ 9.09 |
HypotheticalA | | $ 1,000.00 | $ 1,014.52 | $ 10.76 |
Class C | 2.12% | | | |
Actual | | $ 1,000.00 | $ 701.50 | $ 9.09 |
HypotheticalA | | $ 1,000.00 | $ 1,014.52 | $ 10.76 |
Small Cap Value | 1.11% | | | |
Actual | | $ 1,000.00 | $ 704.80 | $ 4.77 |
HypotheticalA | | $ 1,000.00 | $ 1,019.61 | $ 5.65 |
Institutional Class | 1.11% | | | |
Actual | | $ 1,000.00 | $ 705.20 | $ 4.77 |
HypotheticalA | | $ 1,000.00 | $ 1,019.61 | $ 5.65 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Aspen Insurance Holdings Ltd. | 2.9 | 2.6 |
Carpenter Technology Corp. | 2.9 | 0.0 |
W.R. Berkley Corp. | 2.7 | 0.0 |
United Stationers, Inc. | 2.7 | 2.4 |
Reinsurance Group of America, Inc. | 2.5 | 0.0 |
HNI Corp. | 2.5 | 2.8 |
Washington Federal, Inc. | 2.4 | 1.3 |
Affiliated Managers Group, Inc. | 2.4 | 0.0 |
IPC Holdings Ltd. | 2.3 | 2.3 |
MEDNAX, Inc. | 2.2 | 2.4 |
| 25.5 | |
Top Five Market Sectors as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Financials | 37.5 | 32.7 |
Information Technology | 13.5 | 11.8 |
Consumer Discretionary | 12.7 | 14.0 |
Industrials | 10.6 | 12.0 |
Health Care | 6.9 | 5.3 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009 * | As of July 31, 2008 ** |
| Stocks 94.4% | | | Stocks 98.0% | |
| Convertible
Securities 4.7% | | | Convertible
Securities 0.0% | |
| Short-Term
Investments and
Net Other Assets 0.9% | | | Short-Term
Investments and
Net Other Assets 2.0% | |
* Foreign investments | 12.1% | | ** Foreign investments | 10.9% | |
Semiannual Report
Investments January 31, 2009 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 92.8% |
| Shares | | Value |
CONSUMER DISCRETIONARY - 10.6% |
Diversified Consumer Services - 0.9% |
Regis Corp. | 837,340 | | $ 9,420,075 |
Household Durables - 3.8% |
Centex Corp. (d) | 658,940 | | 5,607,579 |
Ethan Allen Interiors, Inc. | 279,513 | | 3,183,653 |
M.D.C. Holdings, Inc. | 225,000 | | 6,894,000 |
Meritage Homes Corp. (a)(d) | 1,412,593 | | 15,566,775 |
Ryland Group, Inc. (d) | 427,900 | | 6,675,240 |
| | 37,927,247 |
Specialty Retail - 5.0% |
Asbury Automotive Group, Inc. | 1,145,215 | | 4,099,870 |
Penske Auto Group, Inc. (d) | 2,337,760 | | 17,346,179 |
The Men's Wearhouse, Inc. (d) | 1,069,641 | | 12,461,318 |
Tsutsumi Jewelry Co. Ltd. | 760,200 | | 16,718,019 |
| | 50,625,386 |
Textiles, Apparel & Luxury Goods - 0.9% |
Iconix Brand Group, Inc. (a) | 1,050,087 | | 8,684,219 |
TOTAL CONSUMER DISCRETIONARY | | 106,656,927 |
CONSUMER STAPLES - 2.5% |
Food & Staples Retailing - 2.5% |
Casey's General Stores, Inc. | 750,000 | | 15,937,500 |
Ingles Markets, Inc. Class A | 625,487 | | 8,919,445 |
| | 24,856,945 |
ENERGY - 4.0% |
Energy Equipment & Services - 1.2% |
Superior Energy Services, Inc. (a) | 776,700 | | 12,100,986 |
Oil, Gas & Consumable Fuels - 2.8% |
Encore Acquisition Co. (a)(d) | 603,609 | | 16,406,093 |
Mariner Energy, Inc. (a) | 1,166,700 | | 11,550,330 |
| | 27,956,423 |
TOTAL ENERGY | | 40,057,409 |
FINANCIALS - 33.7% |
Capital Markets - 7.5% |
Affiliated Managers Group, Inc. (a) | 600,000 | | 24,114,000 |
Cohen & Steers, Inc. (d) | 1,100,000 | | 11,880,000 |
optionsXpress Holdings, Inc. | 974,510 | | 10,612,414 |
Common Stocks - continued |
| Shares | | Value |
FINANCIALS - continued |
Capital Markets - continued |
Sparx Group Co. Ltd. (d) | 22,235 | | $ 2,524,118 |
TradeStation Group, Inc. (a) | 2,092,291 | | 11,528,523 |
Waddell & Reed Financial, Inc. Class A | 1,050,000 | | 14,826,000 |
| | 75,485,055 |
Commercial Banks - 4.0% |
Associated Banc-Corp. (d) | 1,189,583 | | 18,616,974 |
Boston Private Financial Holdings, Inc. (d) | 1,465,680 | | 6,903,353 |
City National Corp. (d) | 414,900 | | 14,359,689 |
| | 39,880,016 |
Insurance - 12.4% |
Aspen Insurance Holdings Ltd. | 1,300,200 | | 28,734,418 |
IPC Holdings Ltd. | 898,740 | | 23,061,668 |
Max Capital Group Ltd. | 1,169,111 | | 19,886,578 |
Reinsurance Group of America, Inc. | 703,801 | | 25,076,430 |
W.R. Berkley Corp. | 1,025,000 | | 27,142,000 |
| | 123,901,094 |
Real Estate Investment Trusts - 5.0% |
CapitalSource, Inc. (d) | 3,947,200 | | 14,367,808 |
Chimera Investment Corp. | 4,748,323 | | 15,669,466 |
Highwoods Properties, Inc. (SBI) | 491,230 | | 11,082,149 |
National Retail Properties, Inc. | 600,000 | | 8,658,000 |
| | 49,777,423 |
Real Estate Management & Development - 1.8% |
Jones Lang LaSalle, Inc. | 776,000 | | 18,321,360 |
Thrifts & Mortgage Finance - 3.0% |
Astoria Financial Corp. | 600,762 | | 5,454,919 |
Washington Federal, Inc. (d) | 1,981,840 | | 24,336,995 |
| | 29,791,914 |
TOTAL FINANCIALS | | 337,156,862 |
HEALTH CARE - 6.9% |
Health Care Equipment & Supplies - 1.4% |
Abaxis, Inc. (a)(d) | 894,400 | | 14,149,408 |
Health Care Providers & Services - 4.1% |
MEDNAX, Inc. (a) | 666,500 | | 22,374,405 |
VCA Antech, Inc. (a) | 1,000,000 | | 18,820,000 |
| | 41,194,405 |
Common Stocks - continued |
| Shares | | Value |
HEALTH CARE - continued |
Pharmaceuticals - 1.4% |
Perrigo Co. | 486,200 | | $ 14,269,970 |
TOTAL HEALTH CARE | | 69,613,783 |
INDUSTRIALS - 10.2% |
Building Products - 1.7% |
NCI Building Systems, Inc. (a)(d) | 649,320 | | 7,525,619 |
Simpson Manufacturing Co. Ltd. (d) | 475,000 | | 9,533,250 |
| | 17,058,869 |
Commercial Services & Supplies - 5.4% |
ACCO Brands Corp. (a) | 1,250,923 | | 2,401,772 |
HNI Corp. (d) | 1,895,771 | | 25,043,135 |
United Stationers, Inc. (a) | 950,000 | | 26,609,500 |
| | 54,054,407 |
Construction & Engineering - 1.8% |
URS Corp. (a) | 532,376 | | 18,127,403 |
Machinery - 1.3% |
Graco, Inc. | 600,000 | | 12,762,000 |
TOTAL INDUSTRIALS | | 102,002,679 |
INFORMATION TECHNOLOGY - 13.5% |
Communications Equipment - 2.1% |
Polycom, Inc. (a) | 400,000 | | 5,620,000 |
ViaSat, Inc. (a) | 679,472 | | 15,057,100 |
| | 20,677,100 |
Electronic Equipment & Components - 4.5% |
Ingram Micro, Inc. Class A (a) | 1,603,100 | | 19,670,037 |
Macnica, Inc. | 677,400 | | 9,048,067 |
Ryoyo Electro Corp. | 1,272,700 | | 10,320,786 |
SYNNEX Corp. (a) | 389,898 | | 5,984,934 |
| | 45,023,824 |
Internet Software & Services - 4.0% |
DealerTrack Holdings, Inc. (a) | 1,949,434 | | 22,204,053 |
j2 Global Communications, Inc. (a) | 563,149 | | 11,026,457 |
LoopNet, Inc. (a) | 1,094,182 | | 7,112,183 |
| | 40,342,693 |
IT Services - 0.6% |
Telvent GIT SA | 441,358 | | 6,408,518 |
Common Stocks - continued |
| Shares | | Value |
INFORMATION TECHNOLOGY - continued |
Semiconductors & Semiconductor Equipment - 1.7% |
FormFactor, Inc. (a) | 764,157 | | $ 11,890,283 |
Miraial Co. Ltd. (d)(e) | 554,400 | | 5,337,284 |
| | 17,227,567 |
Software - 0.6% |
MICROS Systems, Inc. (a) | 400,000 | | 5,760,000 |
TOTAL INFORMATION TECHNOLOGY | | 135,439,702 |
MATERIALS - 4.6% |
Chemicals - 1.7% |
Spartech Corp. (e) | 1,583,102 | | 5,018,433 |
Valspar Corp. | 710,000 | | 12,318,500 |
| | 17,336,933 |
Metals & Mining - 2.9% |
Carpenter Technology Corp. | 1,725,000 | | 28,462,500 |
TOTAL MATERIALS | | 45,799,433 |
TELECOMMUNICATION SERVICES - 1.8% |
Diversified Telecommunication Services - 1.8% |
Cogent Communications Group, Inc. (a)(d)(e) | 2,750,000 | | 18,287,500 |
UTILITIES - 5.0% |
Electric Utilities - 3.1% |
Allete, Inc. (d) | 277,250 | | 8,622,475 |
Westar Energy, Inc. | 1,100,000 | | 22,088,000 |
| | 30,710,475 |
Gas Utilities - 1.9% |
Southwest Gas Corp. | 760,989 | | 19,603,077 |
TOTAL UTILITIES | | 50,313,552 |
TOTAL COMMON STOCKS (Cost $1,278,818,193) | 930,184,792 |
Nonconvertible Preferred Stocks - 1.6% |
| | | |
CONSUMER DISCRETIONARY - 0.5% |
Household Durables - 0.5% |
M/I Homes, Inc. Series A, 9.75% | 708,100 | | 4,963,781 |
Nonconvertible Preferred Stocks - continued |
| Shares | | Value |
FINANCIALS - 1.1% |
Real Estate Investment Trusts - 0.7% |
Developers Diversified Realty Corp.: | | | |
(depositary shares) Series H, 7.375% | 565,000 | | $ 3,700,750 |
Series I, 7.50% | 430,155 | | 2,903,546 |
| | 6,604,296 |
Thrifts & Mortgage Finance - 0.4% |
Fannie Mae Series S, 8.25% | 3,702,100 | | 4,072,310 |
TOTAL FINANCIALS | | 10,676,606 |
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $28,794,938) | 15,640,387 |
Convertible Bonds - 4.7% |
| Principal Amount | | |
CONSUMER DISCRETIONARY - 1.6% |
Specialty Retail - 1.6% |
United Auto Group, Inc. 3.5% 4/1/26 | | $ 24,000,000 | | 15,418,320 |
FINANCIALS - 2.7% |
Real Estate Investment Trusts - 2.7% |
SL Green Realty Corp. 3% 3/30/27 (f) | | 45,000,000 | | 27,296,932 |
INDUSTRIALS - 0.4% |
Building Products - 0.4% |
NCI Building Systems, Inc. 2.125% 11/15/24 | | 5,000,000 | | 3,976,000 |
TOTAL CONVERTIBLE BONDS (Cost $40,324,451) | 46,691,252 |
Money Market Funds - 9.5% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.78% (b) | 13,832,798 | | $ 13,832,798 |
Fidelity Securities Lending Cash Central Fund, 0.71% (b)(c) | 81,885,586 | | 81,885,586 |
TOTAL MONEY MARKET FUNDS (Cost $95,718,384) | 95,718,384 |
TOTAL INVESTMENT PORTFOLIO - 108.6% (Cost $1,443,655,966) | | 1,088,234,815 |
NET OTHER ASSETS - (8.6)% | | (86,483,004) |
NET ASSETS - 100% | $ 1,001,751,811 |
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 $27,296,932 or 2.7% 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 | $ 159,962 |
Fidelity Securities Lending Cash Central Fund | 1,228,744 |
Total | $ 1,388,706 |
Other Affiliated Issuers |
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Cogent Communications Group, Inc. | $ - | $ 18,402,564 | $ - | $ - | $ 18,287,500 |
Miraial Co. Ltd. | - | 7,176,911 | - | 173,717 | 5,337,284 |
Spartech Corp. | 11,202,911 | 4,588,500 | - | 158,310 | 5,018,433 |
The Pantry, Inc. | 18,783,837 | - | 21,698,273 | - | - |
Zoran Corp. | 13,344,836 | 9,473,071 | 17,237,167 | - | - |
Total | $ 43,331,584 | $ 39,641,046 | $ 38,935,440 | $ 332,027 | $ 28,643,217 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 1,088,234,815 | $ 997,595,289 | $ 90,639,526 | $ - |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited) |
United States of America | 87.9% |
Bermuda | 7.2% |
Japan | 4.3% |
Others (individually less than 1%) | 0.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $77,882,041) - See accompanying schedule: Unaffiliated issuers (cost $1,306,262,991) | $ 963,873,214 | |
Fidelity Central Funds (cost $95,718,384) | 95,718,384 | |
Other affiliated issuers (cost $41,674,591) | 28,643,217 | |
Total Investments (cost $1,443,655,966) | | $ 1,088,234,815 |
Receivable for investments sold | | 2,356,054 |
Receivable for fund shares sold | | 1,730,415 |
Dividends receivable | | 1,136,914 |
Interest receivable | | 750,149 |
Distributions receivable from Fidelity Central Funds | | 59,602 |
Prepaid expenses | | 11,664 |
Other receivables | | 2,016 |
Total assets | | 1,094,281,629 |
| | |
Liabilities | | |
Payable for investments purchased | $ 8,744,357 | |
Payable for fund shares redeemed | 814,939 | |
Accrued management fee | 731,383 | |
Distribution fees payable | 36,641 | |
Other affiliated payables | 282,652 | |
Other payables and accrued expenses | 34,260 | |
Collateral on securities loaned, at value | 81,885,586 | |
Total liabilities | | 92,529,818 |
| | |
Net Assets | | $ 1,001,751,811 |
Net Assets consist of: | | |
Paid in capital | | $ 1,506,055,851 |
Undistributed net investment income | | 453,962 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (149,332,992) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (355,425,010) |
Net Assets | | $ 1,001,751,811 |
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, 2009 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($37,482,352 ÷ 4,573,671 shares) | | $ 8.20 |
| | |
Maximum offering price per share (100/94.25 of $8.20) | | $ 8.70 |
Class T:
Net Asset Value and redemption price per share ($22,054,565 ÷ 2,707,357 shares) | | $ 8.15 |
| | |
Maximum offering price per share (100/96.50 of $8.15) | | $ 8.45 |
Class B:
Net Asset Value and offering price per share ($6,049,740 ÷ 752,381 shares)A | | $ 8.04 |
| | |
Class C:
Net Asset Value and offering price per share ($14,961,185 ÷ 1,860,012 shares)A | | $ 8.04 |
| | |
| | |
Small Cap Value:
Net Asset Value, offering price and redemption price per share ($914,449,231 ÷ 110,835,453 shares) | | $ 8.25 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($6,754,738 ÷ 817,698 shares) | | $ 8.26 |
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, 2009 (Unaudited) |
Investment Income | | |
Dividends (including $332,027 earned from other affiliated issuers) | | $ 12,220,295 |
Interest | | 685,100 |
Income from Fidelity Central Funds (including $1,228,744 from security lending) | | 1,388,706 |
Total income | | 14,294,101 |
| | |
Expenses | | |
Management fee
Basic fee | $ 4,070,191 | |
Performance adjustment | 284,045 | |
Transfer agent fees | 1,637,326 | |
Distribution fees | 256,557 | |
Accounting and security lending fees | 203,729 | |
Custodian fees and expenses | 19,321 | |
Independent trustees' compensation | 3,261 | |
Registration fees | 85,191 | |
Audit | 29,821 | |
Legal | 3,918 | |
Miscellaneous | 21,995 | |
Total expenses before reductions | 6,615,355 | |
Expense reductions | (10,548) | 6,604,807 |
Net investment income (loss) | | 7,689,294 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (137,956,834) | |
Other affiliated issuers | (7,964,745) | |
Foreign currency transactions | 7,846 | |
Total net realized gain (loss) | | (145,913,733) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (262,611,366) | |
Assets and liabilities in foreign currencies | (3,873) | |
Total change in net unrealized appreciation (depreciation) | | (262,615,239) |
Net gain (loss) | | (408,528,972) |
Net increase (decrease) in net assets resulting from operations | | $ (400,839,678) |
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, 2009
(Unaudited) | Year ended
July 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 7,689,294 | $ 2,118,900 |
Net realized gain (loss) | (145,913,733) | 26,624,935 |
Change in net unrealized appreciation (depreciation) | (262,615,239) | (226,824,054) |
Net increase (decrease) in net assets resulting from operations | (400,839,678) | (198,080,219) |
Distributions to shareholders from net investment income | (8,301,279) | - |
Distributions to shareholders from net realized gain | (12,095,172) | (53,456,977) |
Total distributions | (20,396,451) | (53,456,977) |
Share transactions - net increase (decrease) | 163,923,338 | 105,675,336 |
Redemption fees | 273,555 | 144,871 |
Total increase (decrease) in net assets | (257,039,236) | (145,716,989) |
| | |
Net Assets | | |
Beginning of period | 1,258,791,047 | 1,404,508,036 |
End of period (including undistributed net investment income of $453,962 and undistributed net investment income of $1,269,467, respectively) | $ 1,001,751,811 | $ 1,258,791,047 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.82 | $ 14.34 | $ 13.17 | $ 12.80 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .06 | (.01) | (.06) | (.03) | (.04) |
Net realized and unrealized gain (loss) | (3.51) | (1.98) | 1.90 | .74 | 2.84 |
Total from investment operations | (3.45) | (1.99) | 1.84 | .71 | 2.80 |
Distributions from net investment income | (.06) | - | - | - | (.01) |
Distributions from net realized gain | (.11) | (.53) | (.67) | (.35) | - |
Total distributions | (.17) | (.53) | (.67) | (.35) | (.01) |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.20 | $ 11.82 | $ 14.34 | $ 13.17 | $ 12.80 |
Total Return B, C, D | (29.54)% | (14.35)% | 14.59% | 5.72% | 28.06% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 1.37% A | 1.43% | 1.45% | 1.51% | 1.46% A |
Expenses net of fee waivers, if any | 1.37% A | 1.40% | 1.40% | 1.40% | 1.44% A |
Expenses net of all reductions | 1.37% A | 1.40% | 1.40% | 1.36% | 1.38% A |
Net investment income (loss) | 1.13% A | (.05)% | (.44)% | (.24)% | (.46)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 37,482 | $ 52,446 | $ 61,357 | $ 39,931 | $ 9,390 |
Portfolio turnover rate G | 79% A | 149% | 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 T
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.74 | $ 14.28 | $ 13.13 | $ 12.78 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | (.04) | (.10) | (.07) | (.06) |
Net realized and unrealized gain (loss) | (3.48) | (1.97) | 1.90 | .74 | 2.83 |
Total from investment operations | (3.44) | (2.01) | 1.80 | .67 | 2.77 |
Distributions from net investment income | (.04) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.65) | (.33) | - |
Total distributions | (.15) | (.53) | (.65) | (.33) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.15 | $ 11.74 | $ 14.28 | $ 13.13 | $ 12.78 |
Total Return B, C, D | (29.62)% | (14.58)% | 14.34% | 5.47% | 27.80% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 1.63% A | 1.68% | 1.66% | 1.67% | 1.72% A |
Expenses net of fee waivers, if any | 1.63% A | 1.65% | 1.65% | 1.65% | 1.68% A |
Expenses net of all reductions | 1.63% A | 1.65% | 1.65% | 1.61% | 1.62% A |
Net investment income (loss) | .88% A | (.30)% | (.69)% | (.49)% | (.70)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 22,055 | $ 32,091 | $ 51,518 | $ 45,460 | $ 12,725 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.73 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .02 | (.10) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (3.44) | (1.96) | 1.90 | .74 | 2.82 |
Total from investment operations | (3.42) | (2.06) | 1.73 | .61 | 2.72 |
Distributions from net investment income | (.03) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.61) | (.28) | - |
Total distributions | (.14) | (.53) | (.61) | (.28) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.04 | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.73 |
Total Return B, C, D | (29.83)% | (15.04)% | 13.78% | 4.97% | 27.30% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 2.12% A | 2.18% | 2.20% | 2.26% | 2.24% A |
Expenses net of fee waivers, if any | 2.12% A | 2.15% | 2.15% | 2.15% | 2.19% A |
Expenses net of all reductions | 2.12% A | 2.15% | 2.15% | 2.11% | 2.13% A |
Net investment income (loss) | .38% A | (.80)% | (1.19)% | (.99)% | (1.21)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 6,050 | $ 7,886 | $ 12,075 | $ 10,214 | $ 3,931 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.74 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .02 | (.10) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (3.44) | (1.96) | 1.90 | .74 | 2.83 |
Total from investment operations | (3.42) | (2.06) | 1.73 | .61 | 2.73 |
Distributions from net investment income | (.03) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.61) | (.29) | - |
Total distributions | (.14) | (.53) | (.61) | (.29) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.04 | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.74 |
Total Return B, C, D | (29.85)% | (15.04)% | 13.77% | 4.92% | 27.40% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 2.12% A | 2.18% | 2.20% | 2.22% | 2.17% A |
Expenses net of fee waivers, if any | 2.12% A | 2.15% | 2.15% | 2.15% | 2.17% A |
Expenses net of all reductions | 2.12% A | 2.15% | 2.15% | 2.11% | 2.11% A |
Net investment income (loss) | .39% A | (.80)% | (1.19)% | (.99)% | (1.19)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 14,961 | $ 20,924 | $ 34,155 | $ 26,791 | $ 11,732 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .07 | .03 | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (3.54) | (1.99) | 1.91 | .74 | 2.84 |
Total from investment operations | (3.47) | (1.96) | 1.89 | .75 | 2.83 |
Distributions from net investment income | (.08) | - | - | (.01) | (.01) |
Distributions from net realized gain | (.11) | (.56) | (.68) | (.36) | - |
Total distributions | (.19) | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.25 | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (29.52)% | (14.10)% | 14.96% | 6.07% | 28.36% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.11% A | 1.14% | 1.11% | 1.09% | 1.05% A |
Expenses net of fee waivers, if any | 1.11% A | 1.14% | 1.11% | 1.09% | 1.05% A |
Expenses net of all reductions | 1.11% A | 1.13% | 1.11% | 1.06% | .99% A |
Net investment income (loss) | 1.39% A | .22% | (.15)% | .06% | (.08)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 914,449 | $ 1,136,860 | $ 1,233,808 | $ 957,720 | $ 582,689 |
Portfolio turnover rate F | 79% A | 149% | 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
Financial Highlights - Institutional Class
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .07 | .03 | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (3.54) | (1.99) | 1.91 | .74 | 2.84 |
Total from investment operations | (3.47) | (1.96) | 1.89 | .75 | 2.83 |
Distributions from net investment income | (.07) | - | - | (.01) | (.01) |
Distributions from net realized gain | (.11) | (.56) | (.68) | (.36) | - |
Total distributions | (.18) | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.26 | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (29.48)% | (14.10)% | 14.99% | 6.08% | 28.36% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.11% A | 1.13% | 1.10% | 1.08% | 1.07% A |
Expenses net of fee waivers, if any | 1.11% A | 1.13% | 1.10% | 1.08% | 1.07% A |
Expenses net of all reductions | 1.11% A | 1.13% | 1.10% | 1.05% | 1.01% A |
Net investment income (loss) | 1.40% A | .22% | (.13)% | .08% | (.10)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 6,755 | $ 8,584 | $ 11,594 | $ 9,422 | $ 3,761 |
Portfolio turnover rate F | 79% A | 149% | 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, 2009 (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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as 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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments is included at the end of the Fund's Schedule of Investments.
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
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. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships and losses deferred due to wash sales.
Semiannual Report
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 | $ 33,516,483 |
Unrealized depreciation | (399,400,956) |
Net unrealized appreciation (depreciation) | $ (365,884,473) |
Cost for federal income tax purposes | $ 1,454,119,288 |
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.
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 $621,955,657 and $454,438,409, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .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 .76% 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
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 56,544 | $ 2,839 |
Class T | .25% | .25% | 74,124 | - |
Class B | .75% | .25% | 35,752 | 26,814 |
Class C | .75% | .25% | 90,137 | 13,761 |
| | | $ 256,557 | $ 43,414 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 11,616 |
Class T | 1,797 |
Class B* | 10,156 |
Class C* | 1,952 |
| $ 25,521 |
* 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 respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 66,705 | .29 |
Class T | 44,419 | .30 |
Class B | 10,628 | .30 |
Class C | 26,545 | .29 |
Small Cap Value | 1,478,269 | .29 |
Institutional Class | 10,760 | .29 |
| $ 1,637,326 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $29,455 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,399 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.
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 $1,146 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 $1,290. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Small Cap Value | $ 8,000 |
Institutional Class | 112 |
| $ 8,112 |
Semiannual Report
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Freedom 2020 Fund was the owner of record of approximately 11% of the total outstanding shares of the Fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 45% of the total outstanding shares of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
From net investment income | | |
Class A | $ 252,163 | $ - |
Class T | 111,704 | - |
Class B | 20,183 | - |
Class C | 45,207 | - |
Small Cap Value | 7,822,386 | - |
Institutional Class | 49,636 | - |
Total | $ 8,301,279 | $ - |
From net realized gain | | |
Class A | $ 496,926 | $ 2,334,219 |
Class T | 350,121 | 1,800,459 |
Class B | 77,045 | 442,697 |
Class C | 207,577 | 1,258,270 |
Small Cap Value | 10,883,170 | 47,176,109 |
Institutional Class | 80,333 | 445,223 |
Total | $ 12,095,172 | $ 53,456,977 |
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
January 31,
2009 | Year ended
July 31,
2008 | Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
Class A | | | | |
Shares sold | 903,214 | 1,801,333 | $ 9,194,039 | $ 23,728,165 |
Reinvestment of distributions | 64,970 | 158,451 | 694,478 | 2,181,126 |
Shares redeemed | (831,885) | (1,800,932) | (8,113,721) | (23,386,603) |
Net increase (decrease) | 136,299 | 158,852 | $ 1,774,796 | $ 2,522,688 |
Class T | | | | |
Shares sold | 992,143 | 618,951 | $ 11,245,724 | $ 8,024,654 |
Reinvestment of distributions | 40,640 | 127,052 | 449,360 | 1,740,319 |
Shares redeemed | (1,058,182) | (1,620,468) | (9,405,508) | (21,259,209) |
Net increase (decrease) | (25,399) | (874,465) | $ 2,289,576 | $ (11,494,236) |
Class B | | | | |
Shares sold | 202,741 | 128,063 | $ 2,143,065 | $ 1,643,352 |
Reinvestment of distributions | 7,760 | 29,083 | 85,947 | 395,378 |
Shares redeemed | (137,811) | (328,632) | (1,366,770) | (4,160,797) |
Net increase (decrease) | 72,690 | (171,486) | $ 862,242 | $ (2,122,067) |
Class C | | | | |
Shares sold | 433,283 | 565,275 | $ 4,341,014 | $ 7,245,287 |
Reinvestment of distributions | 19,410 | 82,093 | 217,621 | 1,115,865 |
Shares redeemed | (395,862) | (1,251,391) | (3,801,973) | (15,942,770) |
Net increase (decrease) | 56,831 | (604,023) | $ 756,662 | $ (7,581,618) |
Small Cap Value | | | | |
Shares sold | 23,366,344 | 33,217,718 | $ 233,643,406 | $ 432,952,106 |
Reinvestment of distributions | 1,741,583 | 3,344,768 | 18,397,974 | 46,241,130 |
Shares redeemed | (9,761,827) | (26,584,070) | (94,832,731) | (353,880,106) |
Net increase (decrease) | 15,346,100 | 9,978,416 | $ 157,208,649 | $ 125,313,130 |
Institutional Class | | | | |
Shares sold | 245,943 | 353,080 | $ 2,506,550 | $ 4,711,093 |
Reinvestment of distributions | 8,812 | 21,635 | 93,632 | 299,115 |
Shares redeemed | (157,658) | (457,781) | (1,568,769) | (5,972,769) |
Net increase (decrease) | 97,097 | (83,066) | $ 1,031,413 | $ (962,561) |
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Research & Analysis Company
FIL Investment Advisors
Fidelity Investments Japan Limited
FIL Investment Advisors (U.K.) Ltd.
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-0309
1.803737.105
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Small Cap Value
Fund - Institutional Class
Semiannual Report
January 31, 2009
Institutional Class
is a class of Fidelity®
Small Cap Value Fund
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | <Click Here> | 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
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, 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, 2008 to January 31, 2009).
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.
| Annualized
Expense
Ratio | Beginning
Account Value
August 1, 2008 | Ending
Account Value
January 31, 2009 | Expenses Paid
During Period*
August 1, 2008 to
January 31, 2009 |
Class A | 1.37% | | | |
Actual | | $ 1,000.00 | $ 704.60 | $ 5.89 |
HypotheticalA | | $ 1,000.00 | $ 1,018.30 | $ 6.97 |
Class T | 1.63% | | | |
Actual | | $ 1,000.00 | $ 703.80 | $ 7.00 |
HypotheticalA | | $ 1,000.00 | $ 1,016.99 | $ 8.29 |
Class B | 2.12% | | | |
Actual | | $ 1,000.00 | $ 701.70 | $ 9.09 |
HypotheticalA | | $ 1,000.00 | $ 1,014.52 | $ 10.76 |
Class C | 2.12% | | | |
Actual | | $ 1,000.00 | $ 701.50 | $ 9.09 |
HypotheticalA | | $ 1,000.00 | $ 1,014.52 | $ 10.76 |
Small Cap Value | 1.11% | | | |
Actual | | $ 1,000.00 | $ 704.80 | $ 4.77 |
HypotheticalA | | $ 1,000.00 | $ 1,019.61 | $ 5.65 |
Institutional Class | 1.11% | | | |
Actual | | $ 1,000.00 | $ 705.20 | $ 4.77 |
HypotheticalA | | $ 1,000.00 | $ 1,019.61 | $ 5.65 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
Top Ten Stocks as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Aspen Insurance Holdings Ltd. | 2.9 | 2.6 |
Carpenter Technology Corp. | 2.9 | 0.0 |
W.R. Berkley Corp. | 2.7 | 0.0 |
United Stationers, Inc. | 2.7 | 2.4 |
Reinsurance Group of America, Inc. | 2.5 | 0.0 |
HNI Corp. | 2.5 | 2.8 |
Washington Federal, Inc. | 2.4 | 1.3 |
Affiliated Managers Group, Inc. | 2.4 | 0.0 |
IPC Holdings Ltd. | 2.3 | 2.3 |
MEDNAX, Inc. | 2.2 | 2.4 |
| 25.5 | |
Top Five Market Sectors as of January 31, 2009 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Financials | 37.5 | 32.7 |
Information Technology | 13.5 | 11.8 |
Consumer Discretionary | 12.7 | 14.0 |
Industrials | 10.6 | 12.0 |
Health Care | 6.9 | 5.3 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2009 * | As of July 31, 2008 ** |
| Stocks 94.4% | | | Stocks 98.0% | |
| Convertible
Securities 4.7% | | | Convertible
Securities 0.0% | |
| Short-Term
Investments and
Net Other Assets 0.9% | | | Short-Term
Investments and
Net Other Assets 2.0% | |
* Foreign investments | 12.1% | | ** Foreign investments | 10.9% | |
Semiannual Report
Investments January 31, 2009 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 92.8% |
| Shares | | Value |
CONSUMER DISCRETIONARY - 10.6% |
Diversified Consumer Services - 0.9% |
Regis Corp. | 837,340 | | $ 9,420,075 |
Household Durables - 3.8% |
Centex Corp. (d) | 658,940 | | 5,607,579 |
Ethan Allen Interiors, Inc. | 279,513 | | 3,183,653 |
M.D.C. Holdings, Inc. | 225,000 | | 6,894,000 |
Meritage Homes Corp. (a)(d) | 1,412,593 | | 15,566,775 |
Ryland Group, Inc. (d) | 427,900 | | 6,675,240 |
| | 37,927,247 |
Specialty Retail - 5.0% |
Asbury Automotive Group, Inc. | 1,145,215 | | 4,099,870 |
Penske Auto Group, Inc. (d) | 2,337,760 | | 17,346,179 |
The Men's Wearhouse, Inc. (d) | 1,069,641 | | 12,461,318 |
Tsutsumi Jewelry Co. Ltd. | 760,200 | | 16,718,019 |
| | 50,625,386 |
Textiles, Apparel & Luxury Goods - 0.9% |
Iconix Brand Group, Inc. (a) | 1,050,087 | | 8,684,219 |
TOTAL CONSUMER DISCRETIONARY | | 106,656,927 |
CONSUMER STAPLES - 2.5% |
Food & Staples Retailing - 2.5% |
Casey's General Stores, Inc. | 750,000 | | 15,937,500 |
Ingles Markets, Inc. Class A | 625,487 | | 8,919,445 |
| | 24,856,945 |
ENERGY - 4.0% |
Energy Equipment & Services - 1.2% |
Superior Energy Services, Inc. (a) | 776,700 | | 12,100,986 |
Oil, Gas & Consumable Fuels - 2.8% |
Encore Acquisition Co. (a)(d) | 603,609 | | 16,406,093 |
Mariner Energy, Inc. (a) | 1,166,700 | | 11,550,330 |
| | 27,956,423 |
TOTAL ENERGY | | 40,057,409 |
FINANCIALS - 33.7% |
Capital Markets - 7.5% |
Affiliated Managers Group, Inc. (a) | 600,000 | | 24,114,000 |
Cohen & Steers, Inc. (d) | 1,100,000 | | 11,880,000 |
optionsXpress Holdings, Inc. | 974,510 | | 10,612,414 |
Common Stocks - continued |
| Shares | | Value |
FINANCIALS - continued |
Capital Markets - continued |
Sparx Group Co. Ltd. (d) | 22,235 | | $ 2,524,118 |
TradeStation Group, Inc. (a) | 2,092,291 | | 11,528,523 |
Waddell & Reed Financial, Inc. Class A | 1,050,000 | | 14,826,000 |
| | 75,485,055 |
Commercial Banks - 4.0% |
Associated Banc-Corp. (d) | 1,189,583 | | 18,616,974 |
Boston Private Financial Holdings, Inc. (d) | 1,465,680 | | 6,903,353 |
City National Corp. (d) | 414,900 | | 14,359,689 |
| | 39,880,016 |
Insurance - 12.4% |
Aspen Insurance Holdings Ltd. | 1,300,200 | | 28,734,418 |
IPC Holdings Ltd. | 898,740 | | 23,061,668 |
Max Capital Group Ltd. | 1,169,111 | | 19,886,578 |
Reinsurance Group of America, Inc. | 703,801 | | 25,076,430 |
W.R. Berkley Corp. | 1,025,000 | | 27,142,000 |
| | 123,901,094 |
Real Estate Investment Trusts - 5.0% |
CapitalSource, Inc. (d) | 3,947,200 | | 14,367,808 |
Chimera Investment Corp. | 4,748,323 | | 15,669,466 |
Highwoods Properties, Inc. (SBI) | 491,230 | | 11,082,149 |
National Retail Properties, Inc. | 600,000 | | 8,658,000 |
| | 49,777,423 |
Real Estate Management & Development - 1.8% |
Jones Lang LaSalle, Inc. | 776,000 | | 18,321,360 |
Thrifts & Mortgage Finance - 3.0% |
Astoria Financial Corp. | 600,762 | | 5,454,919 |
Washington Federal, Inc. (d) | 1,981,840 | | 24,336,995 |
| | 29,791,914 |
TOTAL FINANCIALS | | 337,156,862 |
HEALTH CARE - 6.9% |
Health Care Equipment & Supplies - 1.4% |
Abaxis, Inc. (a)(d) | 894,400 | | 14,149,408 |
Health Care Providers & Services - 4.1% |
MEDNAX, Inc. (a) | 666,500 | | 22,374,405 |
VCA Antech, Inc. (a) | 1,000,000 | | 18,820,000 |
| | 41,194,405 |
Common Stocks - continued |
| Shares | | Value |
HEALTH CARE - continued |
Pharmaceuticals - 1.4% |
Perrigo Co. | 486,200 | | $ 14,269,970 |
TOTAL HEALTH CARE | | 69,613,783 |
INDUSTRIALS - 10.2% |
Building Products - 1.7% |
NCI Building Systems, Inc. (a)(d) | 649,320 | | 7,525,619 |
Simpson Manufacturing Co. Ltd. (d) | 475,000 | | 9,533,250 |
| | 17,058,869 |
Commercial Services & Supplies - 5.4% |
ACCO Brands Corp. (a) | 1,250,923 | | 2,401,772 |
HNI Corp. (d) | 1,895,771 | | 25,043,135 |
United Stationers, Inc. (a) | 950,000 | | 26,609,500 |
| | 54,054,407 |
Construction & Engineering - 1.8% |
URS Corp. (a) | 532,376 | | 18,127,403 |
Machinery - 1.3% |
Graco, Inc. | 600,000 | | 12,762,000 |
TOTAL INDUSTRIALS | | 102,002,679 |
INFORMATION TECHNOLOGY - 13.5% |
Communications Equipment - 2.1% |
Polycom, Inc. (a) | 400,000 | | 5,620,000 |
ViaSat, Inc. (a) | 679,472 | | 15,057,100 |
| | 20,677,100 |
Electronic Equipment & Components - 4.5% |
Ingram Micro, Inc. Class A (a) | 1,603,100 | | 19,670,037 |
Macnica, Inc. | 677,400 | | 9,048,067 |
Ryoyo Electro Corp. | 1,272,700 | | 10,320,786 |
SYNNEX Corp. (a) | 389,898 | | 5,984,934 |
| | 45,023,824 |
Internet Software & Services - 4.0% |
DealerTrack Holdings, Inc. (a) | 1,949,434 | | 22,204,053 |
j2 Global Communications, Inc. (a) | 563,149 | | 11,026,457 |
LoopNet, Inc. (a) | 1,094,182 | | 7,112,183 |
| | 40,342,693 |
IT Services - 0.6% |
Telvent GIT SA | 441,358 | | 6,408,518 |
Common Stocks - continued |
| Shares | | Value |
INFORMATION TECHNOLOGY - continued |
Semiconductors & Semiconductor Equipment - 1.7% |
FormFactor, Inc. (a) | 764,157 | | $ 11,890,283 |
Miraial Co. Ltd. (d)(e) | 554,400 | | 5,337,284 |
| | 17,227,567 |
Software - 0.6% |
MICROS Systems, Inc. (a) | 400,000 | | 5,760,000 |
TOTAL INFORMATION TECHNOLOGY | | 135,439,702 |
MATERIALS - 4.6% |
Chemicals - 1.7% |
Spartech Corp. (e) | 1,583,102 | | 5,018,433 |
Valspar Corp. | 710,000 | | 12,318,500 |
| | 17,336,933 |
Metals & Mining - 2.9% |
Carpenter Technology Corp. | 1,725,000 | | 28,462,500 |
TOTAL MATERIALS | | 45,799,433 |
TELECOMMUNICATION SERVICES - 1.8% |
Diversified Telecommunication Services - 1.8% |
Cogent Communications Group, Inc. (a)(d)(e) | 2,750,000 | | 18,287,500 |
UTILITIES - 5.0% |
Electric Utilities - 3.1% |
Allete, Inc. (d) | 277,250 | | 8,622,475 |
Westar Energy, Inc. | 1,100,000 | | 22,088,000 |
| | 30,710,475 |
Gas Utilities - 1.9% |
Southwest Gas Corp. | 760,989 | | 19,603,077 |
TOTAL UTILITIES | | 50,313,552 |
TOTAL COMMON STOCKS (Cost $1,278,818,193) | 930,184,792 |
Nonconvertible Preferred Stocks - 1.6% |
| | | |
CONSUMER DISCRETIONARY - 0.5% |
Household Durables - 0.5% |
M/I Homes, Inc. Series A, 9.75% | 708,100 | | 4,963,781 |
Nonconvertible Preferred Stocks - continued |
| Shares | | Value |
FINANCIALS - 1.1% |
Real Estate Investment Trusts - 0.7% |
Developers Diversified Realty Corp.: | | | |
(depositary shares) Series H, 7.375% | 565,000 | | $ 3,700,750 |
Series I, 7.50% | 430,155 | | 2,903,546 |
| | 6,604,296 |
Thrifts & Mortgage Finance - 0.4% |
Fannie Mae Series S, 8.25% | 3,702,100 | | 4,072,310 |
TOTAL FINANCIALS | | 10,676,606 |
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $28,794,938) | 15,640,387 |
Convertible Bonds - 4.7% |
| Principal Amount | | |
CONSUMER DISCRETIONARY - 1.6% |
Specialty Retail - 1.6% |
United Auto Group, Inc. 3.5% 4/1/26 | | $ 24,000,000 | | 15,418,320 |
FINANCIALS - 2.7% |
Real Estate Investment Trusts - 2.7% |
SL Green Realty Corp. 3% 3/30/27 (f) | | 45,000,000 | | 27,296,932 |
INDUSTRIALS - 0.4% |
Building Products - 0.4% |
NCI Building Systems, Inc. 2.125% 11/15/24 | | 5,000,000 | | 3,976,000 |
TOTAL CONVERTIBLE BONDS (Cost $40,324,451) | 46,691,252 |
Money Market Funds - 9.5% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.78% (b) | 13,832,798 | | $ 13,832,798 |
Fidelity Securities Lending Cash Central Fund, 0.71% (b)(c) | 81,885,586 | | 81,885,586 |
TOTAL MONEY MARKET FUNDS (Cost $95,718,384) | 95,718,384 |
TOTAL INVESTMENT PORTFOLIO - 108.6% (Cost $1,443,655,966) | | 1,088,234,815 |
NET OTHER ASSETS - (8.6)% | | (86,483,004) |
NET ASSETS - 100% | $ 1,001,751,811 |
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 $27,296,932 or 2.7% 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 | $ 159,962 |
Fidelity Securities Lending Cash Central Fund | 1,228,744 |
Total | $ 1,388,706 |
Other Affiliated Issuers |
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Cogent Communications Group, Inc. | $ - | $ 18,402,564 | $ - | $ - | $ 18,287,500 |
Miraial Co. Ltd. | - | 7,176,911 | - | 173,717 | 5,337,284 |
Spartech Corp. | 11,202,911 | 4,588,500 | - | 158,310 | 5,018,433 |
The Pantry, Inc. | 18,783,837 | - | 21,698,273 | - | - |
Zoran Corp. | 13,344,836 | 9,473,071 | 17,237,167 | - | - |
Total | $ 43,331,584 | $ 39,641,046 | $ 38,935,440 | $ 332,027 | $ 28,643,217 |
Other Information |
The following is a summary of the inputs used, as of January 31, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities | $ 1,088,234,815 | $ 997,595,289 | $ 90,639,526 | $ - |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited) |
United States of America | 87.9% |
Bermuda | 7.2% |
Japan | 4.3% |
Others (individually less than 1%) | 0.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| January 31, 2009 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $77,882,041) - See accompanying schedule: Unaffiliated issuers (cost $1,306,262,991) | $ 963,873,214 | |
Fidelity Central Funds (cost $95,718,384) | 95,718,384 | |
Other affiliated issuers (cost $41,674,591) | 28,643,217 | |
Total Investments (cost $1,443,655,966) | | $ 1,088,234,815 |
Receivable for investments sold | | 2,356,054 |
Receivable for fund shares sold | | 1,730,415 |
Dividends receivable | | 1,136,914 |
Interest receivable | | 750,149 |
Distributions receivable from Fidelity Central Funds | | 59,602 |
Prepaid expenses | | 11,664 |
Other receivables | | 2,016 |
Total assets | | 1,094,281,629 |
| | |
Liabilities | | |
Payable for investments purchased | $ 8,744,357 | |
Payable for fund shares redeemed | 814,939 | |
Accrued management fee | 731,383 | |
Distribution fees payable | 36,641 | |
Other affiliated payables | 282,652 | |
Other payables and accrued expenses | 34,260 | |
Collateral on securities loaned, at value | 81,885,586 | |
Total liabilities | | 92,529,818 |
| | |
Net Assets | | $ 1,001,751,811 |
Net Assets consist of: | | |
Paid in capital | | $ 1,506,055,851 |
Undistributed net investment income | | 453,962 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (149,332,992) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (355,425,010) |
Net Assets | | $ 1,001,751,811 |
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, 2009 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($37,482,352 ÷ 4,573,671 shares) | | $ 8.20 |
| | |
Maximum offering price per share (100/94.25 of $8.20) | | $ 8.70 |
Class T:
Net Asset Value and redemption price per share ($22,054,565 ÷ 2,707,357 shares) | | $ 8.15 |
| | |
Maximum offering price per share (100/96.50 of $8.15) | | $ 8.45 |
Class B:
Net Asset Value and offering price per share ($6,049,740 ÷ 752,381 shares)A | | $ 8.04 |
| | |
Class C:
Net Asset Value and offering price per share ($14,961,185 ÷ 1,860,012 shares)A | | $ 8.04 |
| | |
| | |
Small Cap Value:
Net Asset Value, offering price and redemption price per share ($914,449,231 ÷ 110,835,453 shares) | | $ 8.25 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($6,754,738 ÷ 817,698 shares) | | $ 8.26 |
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, 2009 (Unaudited) |
Investment Income | | |
Dividends (including $332,027 earned from other affiliated issuers) | | $ 12,220,295 |
Interest | | 685,100 |
Income from Fidelity Central Funds (including $1,228,744 from security lending) | | 1,388,706 |
Total income | | 14,294,101 |
| | |
Expenses | | |
Management fee
Basic fee | $ 4,070,191 | |
Performance adjustment | 284,045 | |
Transfer agent fees | 1,637,326 | |
Distribution fees | 256,557 | |
Accounting and security lending fees | 203,729 | |
Custodian fees and expenses | 19,321 | |
Independent trustees' compensation | 3,261 | |
Registration fees | 85,191 | |
Audit | 29,821 | |
Legal | 3,918 | |
Miscellaneous | 21,995 | |
Total expenses before reductions | 6,615,355 | |
Expense reductions | (10,548) | 6,604,807 |
Net investment income (loss) | | 7,689,294 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (137,956,834) | |
Other affiliated issuers | (7,964,745) | |
Foreign currency transactions | 7,846 | |
Total net realized gain (loss) | | (145,913,733) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (262,611,366) | |
Assets and liabilities in foreign currencies | (3,873) | |
Total change in net unrealized appreciation (depreciation) | | (262,615,239) |
Net gain (loss) | | (408,528,972) |
Net increase (decrease) in net assets resulting from operations | | $ (400,839,678) |
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, 2009
(Unaudited) | Year ended
July 31,
2008 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 7,689,294 | $ 2,118,900 |
Net realized gain (loss) | (145,913,733) | 26,624,935 |
Change in net unrealized appreciation (depreciation) | (262,615,239) | (226,824,054) |
Net increase (decrease) in net assets resulting from operations | (400,839,678) | (198,080,219) |
Distributions to shareholders from net investment income | (8,301,279) | - |
Distributions to shareholders from net realized gain | (12,095,172) | (53,456,977) |
Total distributions | (20,396,451) | (53,456,977) |
Share transactions - net increase (decrease) | 163,923,338 | 105,675,336 |
Redemption fees | 273,555 | 144,871 |
Total increase (decrease) in net assets | (257,039,236) | (145,716,989) |
| | |
Net Assets | | |
Beginning of period | 1,258,791,047 | 1,404,508,036 |
End of period (including undistributed net investment income of $453,962 and undistributed net investment income of $1,269,467, respectively) | $ 1,001,751,811 | $ 1,258,791,047 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.82 | $ 14.34 | $ 13.17 | $ 12.80 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .06 | (.01) | (.06) | (.03) | (.04) |
Net realized and unrealized gain (loss) | (3.51) | (1.98) | 1.90 | .74 | 2.84 |
Total from investment operations | (3.45) | (1.99) | 1.84 | .71 | 2.80 |
Distributions from net investment income | (.06) | - | - | - | (.01) |
Distributions from net realized gain | (.11) | (.53) | (.67) | (.35) | - |
Total distributions | (.17) | (.53) | (.67) | (.35) | (.01) |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.20 | $ 11.82 | $ 14.34 | $ 13.17 | $ 12.80 |
Total Return B, C, D | (29.54)% | (14.35)% | 14.59% | 5.72% | 28.06% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 1.37% A | 1.43% | 1.45% | 1.51% | 1.46% A |
Expenses net of fee waivers, if any | 1.37% A | 1.40% | 1.40% | 1.40% | 1.44% A |
Expenses net of all reductions | 1.37% A | 1.40% | 1.40% | 1.36% | 1.38% A |
Net investment income (loss) | 1.13% A | (.05)% | (.44)% | (.24)% | (.46)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 37,482 | $ 52,446 | $ 61,357 | $ 39,931 | $ 9,390 |
Portfolio turnover rate G | 79% A | 149% | 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 T
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.74 | $ 14.28 | $ 13.13 | $ 12.78 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | (.04) | (.10) | (.07) | (.06) |
Net realized and unrealized gain (loss) | (3.48) | (1.97) | 1.90 | .74 | 2.83 |
Total from investment operations | (3.44) | (2.01) | 1.80 | .67 | 2.77 |
Distributions from net investment income | (.04) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.65) | (.33) | - |
Total distributions | (.15) | (.53) | (.65) | (.33) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.15 | $ 11.74 | $ 14.28 | $ 13.13 | $ 12.78 |
Total Return B, C, D | (29.62)% | (14.58)% | 14.34% | 5.47% | 27.80% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 1.63% A | 1.68% | 1.66% | 1.67% | 1.72% A |
Expenses net of fee waivers, if any | 1.63% A | 1.65% | 1.65% | 1.65% | 1.68% A |
Expenses net of all reductions | 1.63% A | 1.65% | 1.65% | 1.61% | 1.62% A |
Net investment income (loss) | .88% A | (.30)% | (.69)% | (.49)% | (.70)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 22,055 | $ 32,091 | $ 51,518 | $ 45,460 | $ 12,725 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.73 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .02 | (.10) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (3.44) | (1.96) | 1.90 | .74 | 2.82 |
Total from investment operations | (3.42) | (2.06) | 1.73 | .61 | 2.72 |
Distributions from net investment income | (.03) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.61) | (.28) | - |
Total distributions | (.14) | (.53) | (.61) | (.28) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.04 | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.73 |
Total Return B, C, D | (29.83)% | (15.04)% | 13.78% | 4.97% | 27.30% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 2.12% A | 2.18% | 2.20% | 2.26% | 2.24% A |
Expenses net of fee waivers, if any | 2.12% A | 2.15% | 2.15% | 2.15% | 2.19% A |
Expenses net of all reductions | 2.12% A | 2.15% | 2.15% | 2.11% | 2.13% A |
Net investment income (loss) | .38% A | (.80)% | (1.19)% | (.99)% | (1.21)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 6,050 | $ 7,886 | $ 12,075 | $ 10,214 | $ 3,931 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.74 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .02 | (.10) | (.17) | (.13) | (.10) |
Net realized and unrealized gain (loss) | (3.44) | (1.96) | 1.90 | .74 | 2.83 |
Total from investment operations | (3.42) | (2.06) | 1.73 | .61 | 2.73 |
Distributions from net investment income | (.03) | - | - | - | - |
Distributions from net realized gain | (.11) | (.53) | (.61) | (.29) | - |
Total distributions | (.14) | (.53) | (.61) | (.29) | - |
Redemption fees added to paid in capital E | - J | - J | - J | .01 | .01 |
Net asset value, end of period | $ 8.04 | $ 11.60 | $ 14.19 | $ 13.07 | $ 12.74 |
Total Return B, C, D | (29.85)% | (15.04)% | 13.77% | 4.92% | 27.40% |
Ratios to Average Net Assets F, I | | | | |
Expenses before reductions | 2.12% A | 2.18% | 2.20% | 2.22% | 2.17% A |
Expenses net of fee waivers, if any | 2.12% A | 2.15% | 2.15% | 2.15% | 2.17% A |
Expenses net of all reductions | 2.12% A | 2.15% | 2.15% | 2.11% | 2.11% A |
Net investment income (loss) | .39% A | (.80)% | (1.19)% | (.99)% | (1.19)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 14,961 | $ 20,924 | $ 34,155 | $ 26,791 | $ 11,732 |
Portfolio turnover rate G | 79% A | 149% | 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, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .07 | .03 | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (3.54) | (1.99) | 1.91 | .74 | 2.84 |
Total from investment operations | (3.47) | (1.96) | 1.89 | .75 | 2.83 |
Distributions from net investment income | (.08) | - | - | (.01) | (.01) |
Distributions from net realized gain | (.11) | (.56) | (.68) | (.36) | - |
Total distributions | (.19) | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.25 | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (29.52)% | (14.10)% | 14.96% | 6.07% | 28.36% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.11% A | 1.14% | 1.11% | 1.09% | 1.05% A |
Expenses net of fee waivers, if any | 1.11% A | 1.14% | 1.11% | 1.09% | 1.05% A |
Expenses net of all reductions | 1.11% A | 1.13% | 1.11% | 1.06% | .99% A |
Net investment income (loss) | 1.39% A | .22% | (.15)% | .06% | (.08)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 914,449 | $ 1,136,860 | $ 1,233,808 | $ 957,720 | $ 582,689 |
Portfolio turnover rate F | 79% A | 149% | 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
Financial Highlights - Institutional Class
| Six months ended
January 31, 2009 | Years ended July 31, |
| (Unaudited) | 2008 | 2007 | 2006 | 2005 G |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .07 | .03 | (.02) | .01 | (.01) |
Net realized and unrealized gain (loss) | (3.54) | (1.99) | 1.91 | .74 | 2.84 |
Total from investment operations | (3.47) | (1.96) | 1.89 | .75 | 2.83 |
Distributions from net investment income | (.07) | - | - | (.01) | (.01) |
Distributions from net realized gain | (.11) | (.56) | (.68) | (.36) | - |
Total distributions | (.18) | (.56) | (.68) | (.37) | (.01) |
Redemption fees added to paid in capital D | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.26 | $ 11.91 | $ 14.43 | $ 13.22 | $ 12.83 |
Total Return B, C | (29.48)% | (14.10)% | 14.99% | 6.08% | 28.36% |
Ratios to Average Net Assets E, H | | | | |
Expenses before reductions | 1.11% A | 1.13% | 1.10% | 1.08% | 1.07% A |
Expenses net of fee waivers, if any | 1.11% A | 1.13% | 1.10% | 1.08% | 1.07% A |
Expenses net of all reductions | 1.11% A | 1.13% | 1.10% | 1.05% | 1.01% A |
Net investment income (loss) | 1.40% A | .22% | (.13)% | .08% | (.10)% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 6,755 | $ 8,584 | $ 11,594 | $ 9,422 | $ 3,761 |
Portfolio turnover rate F | 79% A | 149% | 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, 2009 (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 held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as 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 reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable.
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
The three levels of the hierarchy under SFAS 157 are described below:
Level 1 | Quoted prices in active markets for identical securities. |
Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of January 31, 2009, for the Fund's investments is included at the end of the Fund's Schedule of Investments.
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 per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
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. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships and losses deferred due to wash sales.
Semiannual Report
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 | $ 33,516,483 |
Unrealized depreciation | (399,400,956) |
Net unrealized appreciation (depreciation) | $ (365,884,473) |
Cost for federal income tax purposes | $ 1,454,119,288 |
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.
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 $621,955,657 and $454,438,409, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .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 .76% 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
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 56,544 | $ 2,839 |
Class T | .25% | .25% | 74,124 | - |
Class B | .75% | .25% | 35,752 | 26,814 |
Class C | .75% | .25% | 90,137 | 13,761 |
| | | $ 256,557 | $ 43,414 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 11,616 |
Class T | 1,797 |
Class B* | 10,156 |
Class C* | 1,952 |
| $ 25,521 |
* 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 respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 66,705 | .29 |
Class T | 44,419 | .30 |
Class B | 10,628 | .30 |
Class C | 26,545 | .29 |
Small Cap Value | 1,478,269 | .29 |
Institutional Class | 10,760 | .29 |
| $ 1,637,326 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $29,455 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,399 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.
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 $1,146 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 $1,290. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Small Cap Value | $ 8,000 |
Institutional Class | 112 |
| $ 8,112 |
Semiannual Report
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Freedom 2020 Fund was the owner of record of approximately 11% of the total outstanding shares of the Fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 45% of the total outstanding shares of the Fund.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
From net investment income | | |
Class A | $ 252,163 | $ - |
Class T | 111,704 | - |
Class B | 20,183 | - |
Class C | 45,207 | - |
Small Cap Value | 7,822,386 | - |
Institutional Class | 49,636 | - |
Total | $ 8,301,279 | $ - |
From net realized gain | | |
Class A | $ 496,926 | $ 2,334,219 |
Class T | 350,121 | 1,800,459 |
Class B | 77,045 | 442,697 |
Class C | 207,577 | 1,258,270 |
Small Cap Value | 10,883,170 | 47,176,109 |
Institutional Class | 80,333 | 445,223 |
Total | $ 12,095,172 | $ 53,456,977 |
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
January 31,
2009 | Year ended
July 31,
2008 | Six months ended
January 31,
2009 | Year ended
July 31,
2008 |
Class A | | | | |
Shares sold | 903,214 | 1,801,333 | $ 9,194,039 | $ 23,728,165 |
Reinvestment of distributions | 64,970 | 158,451 | 694,478 | 2,181,126 |
Shares redeemed | (831,885) | (1,800,932) | (8,113,721) | (23,386,603) |
Net increase (decrease) | 136,299 | 158,852 | $ 1,774,796 | $ 2,522,688 |
Class T | | | | |
Shares sold | 992,143 | 618,951 | $ 11,245,724 | $ 8,024,654 |
Reinvestment of distributions | 40,640 | 127,052 | 449,360 | 1,740,319 |
Shares redeemed | (1,058,182) | (1,620,468) | (9,405,508) | (21,259,209) |
Net increase (decrease) | (25,399) | (874,465) | $ 2,289,576 | $ (11,494,236) |
Class B | | | | |
Shares sold | 202,741 | 128,063 | $ 2,143,065 | $ 1,643,352 |
Reinvestment of distributions | 7,760 | 29,083 | 85,947 | 395,378 |
Shares redeemed | (137,811) | (328,632) | (1,366,770) | (4,160,797) |
Net increase (decrease) | 72,690 | (171,486) | $ 862,242 | $ (2,122,067) |
Class C | | | | |
Shares sold | 433,283 | 565,275 | $ 4,341,014 | $ 7,245,287 |
Reinvestment of distributions | 19,410 | 82,093 | 217,621 | 1,115,865 |
Shares redeemed | (395,862) | (1,251,391) | (3,801,973) | (15,942,770) |
Net increase (decrease) | 56,831 | (604,023) | $ 756,662 | $ (7,581,618) |
Small Cap Value | | | | |
Shares sold | 23,366,344 | 33,217,718 | $ 233,643,406 | $ 432,952,106 |
Reinvestment of distributions | 1,741,583 | 3,344,768 | 18,397,974 | 46,241,130 |
Shares redeemed | (9,761,827) | (26,584,070) | (94,832,731) | (353,880,106) |
Net increase (decrease) | 15,346,100 | 9,978,416 | $ 157,208,649 | $ 125,313,130 |
Institutional Class | | | | |
Shares sold | 245,943 | 353,080 | $ 2,506,550 | $ 4,711,093 |
Reinvestment of distributions | 8,812 | 21,635 | 93,632 | 299,115 |
Shares redeemed | (157,658) | (457,781) | (1,568,769) | (5,972,769) |
Net increase (decrease) | 97,097 | (83,066) | $ 1,031,413 | $ (962,561) |
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Research & Analysis Company
FIL Investment Advisors
Fidelity Investments Japan Limited
FIL Investment Advisors (U.K.) Ltd.
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-0309
1.803748.105
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) Not applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity 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/ Kenneth B. Robins |
| Kenneth B. Robins |
| President and Treasurer |
| |
Date: | April 3, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Kenneth B. Robins |
| Kenneth B. Robins |
| President and Treasurer |
| |
Date: | April 3, 2009 |
By: | /s/Christine Reynolds |
| Christine Reynolds |
| Chief Financial Officer |
| |
Date: | April 3, 2009 |
